https://www.axios.com/2024/07/25/gdp-report-q2-us-economy?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

The U.S. economy grew at a 2.8% annualized rate in the second quarter—a faster rate than economists expected as consumer spending increased and businesses built up inventories, the Commerce Department said on Thursday.

Why it matters:

The new data raises confidence the economy has achieved a “soft landing” — healthy economic growth alongside cooling inflation.

• Economists expected an annualized growth rate of 1.9% last quarter. The economy grew at a 1.4% rate in the first three months of the year.

Driving the news:

The accelerated growth stemmed from a jump in inventory investment and consumer spending.

• Companies also increased spending on equipment and intellectual property. That was partly offset by a slump in housing, the government said.
• Personal consumption expenditures rose at a 2.3% annualized rate last quarter, up from the 1.4% in the first quarter.
• Consumer spending contributed 1.6% to the rise in GDP, while private inventories added 0.82 percentage point.

The big picture:

Gloomy forecasts of a recession over the past year have not come to pass.

• The Federal Reserve raised interest rates to the highest in two-decades to restrain growth and bring down inflation—raising expectations those actions would tip the economy into a sharp slowdown.
• Fed officials have cautiously suggested the economy has achieved a soft landing as inflation dissipates.
• The central bank is expected to keep rates on hold at the policy meeting next week and set the table for a rate cut in September.

The bottom line:

The economy continues to defy expectations of a slowdown.