Economy Beats Expectations

 

The US economy grew at an annualized rate of 2.8% in the second quarter of 2024, according to preliminary data yesterday. The figure beat analysts' expectations of 2.1% and comes as inflation continues to cool. The announcement sparked hopes the economy was on track for a soft landing, in which inflation is curbed without triggering a recession. The US gross domestic product was double the 1.4% growth rate in the first quarter. It also came as consumer prices last quarter grew at 2.6%—above the Federal Reserve's target inflation rate of 2% but down from 3.4% in the first quarter. Household spending drove over two-thirds of GDP growth; Americans save about 3.8% of their monthly paychecks today, down from 7% prepandemic. The news reinforced expectations the Federal Reserve will keep interest rates steady at next week's meeting but may cut rates in September. The country's total yearly GDP is roughly $28.6T. See historical data here.