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U.S. GDP growth holds at 1.5% as consumption and investment stay strong
Consumer spending rose 3.4% and business investment climbed 8.5% in Q2, while international trade reduced growth by 1.1 percentage points.
U.S. economic growth in the second quarter came in at 1.5% quarter-on-quarter annualized, unchanged from the advance estimate, according to Action Forex. The headline result masks a stronger set of underlying components, led by household demand and fixed investment.
Consumer spending increased 3.4%, up from the initial 3.2% estimate, and contrasted with slower growth in the prior quarter when spending rose 0.5%. Spending on goods and services accelerated to 4.3% and 3.1%, respectively, and household consumption alongside investment grew at its fastest pace in 13 quarters based on the outlet’s assessment.
Business investment rose 8.5% during the quarter, with gains in equipment spending (+13.6%) and intellectual property products (+8.8%). Investment in structures declined by 1.8% for the tenth straight quarter, while residential investment increased 1.2% after home sales improved during the spring buying season.
International trade reduced Q2 growth by 1.1 percentage points, driven by imports rising 12.5% versus the initial 11.5% estimate, partially offset by exports up 4.5%. Final sales to private domestic purchasers increased 4.2% compared with 1.7% in Q1, and Real Gross Domestic Income rose 2.2% after a 1.2% rise in Q1, with Action Forex noting no material changes in the second estimate and pointing to risks from higher interest rates, energy price volatility, and a new trade dispute with Canada.