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US GDP growth slows in Q2 as consumer spending rebounds
Second-quarter GDP came in at a 1.5% annualized pace, but the report said the government spending and slower investment weighed on the headline while consumer spending accelerated.
Thursday’s U.S. economic data painted a mixed picture, with growth slowing more than expected in the second quarter even as underlying details were described as stronger. The advance estimate put second-quarter GDP at a 1.5% annualized rate, below the 2.1% consensus forecast and down from 2.1% in the first quarter, according to Forexlive.
The main positive was a sharp rebound in consumer spending, which the outlet said points to households remaining willing to spend despite higher interest rates. Forexlive added that the weaker headline GDP figure was attributed more to government spending and slower investment than to deterioration in private demand.
Inflation remained above the Federal Reserve’s 2% objective, but the monthly data were described as continuing to cool. The outlet said monthly figures continued to moderate and highlighted a Dallas Fed Trimmed Mean measure, which it described as 1.4% versus 2.7% in May, suggesting underlying price pressures are easing faster than headline readings indicate.
Weekly jobless claims, meanwhile, reinforced the view that employers are holding onto workers. Forexlive said both measures came in better than expected, keeping layoffs near historically low levels, and it noted that the Fed is still focused on bringing inflation back to 2%.