The U.S. economy grew at a 2.4% annual pace in the second quarter running from April to June, propelled by strong consumer spending and a rebound in business investment.
Wall Street analysts had forecast a 2% increase in gross domestic product, the official scorecard for the economy. GDP had expanded by 2% in the first quarter.
Consumer spending, the main engine of U.S. growth, rose at a 1.6% pace, the government said Thursday. GDP also got a lift from corporate spending on equipment and structures such as oil rigs and new manufacturing plants.
The economy has shown remarkable resilience this year despite high inflation and rising interest rates, pushing out widespread forecasts of a recession until 2024. Some economists even think the U.S. might avoid one altogether.
GDP is mostly a look in the rear-view mirror, but what it shows is that the U.S. economy has faced fewer roadblocks than expected.
The economy is still expanding in the face of rising interest rates. Most Americans who want a job have one and their wages are going up, too. Not enough to ease the pain of inflation, but enough to help pay the bills and keep the economy out of recession.
Yet the economy is unlikely to speed up much until inflation falls toward the Fed’s 2% target, the central bank cuts interest rates and businesses increase spending again. It could be a year or more before that happens.