US economy grew faster than expected during Q2

The US economy grew faster than expected in the second quarter of 2024, and inflation fell unchanged from expectations of a September interest rate cut by the Federal Reserve.

According to CNN, the Bureau of Economic Analysis of the Ministry of Commerce said in its advance estimate of the gross domestic product for the second quarter, today, Thursday, that the gross domestic product rose at an annual rate of 2.8% in the last quarter.

Economists polled by Reuters expected the gross domestic product to rise at a rate of 2 percent, and estimates ranged from a rate of 1.1% to 3.4%, and the economy grew at a rate of 1.4% in the first quarter.

US central bank officials consider the 1.8% growth rate to be a non-inflationary growth rate.

The economy, which continues to outperform its global peers despite significant interest rate increases from the Federal Reserve in 2022 and 2023, remains supported by a resilient labor market even as the unemployment rate rises to a two-and-a-half-year high of 4.1 percent.

The personal consumption expenditures (PCE) price index, excluding volatile food and energy components, rose 2.9 percent after rising 3.7 percent in the first quarter, a welcome relief from US central bank officials ahead of next week’s policy meeting.

The so-called core personal consumption expenditures price index is one of the inflation measures the Fed follows to meet its 2 percent target.

The Fed has maintained its benchmark overnight interest rate in the current range of 5.25 percent to 5.50 percent over the past year, and has raised interest rates by 525 basis points since 2022, and financial markets expect three interest rate cuts this year, starting in September. September.

Despite the strong pace of economic growth, the outlook for the second half of the year is uncertain. The labor market is slowing down; What will affect wage gains?