US Economy Expands by 1.5% – Moneyweb

The US economy grew at an unchanged rate of 1.5% in the second quarter, although more detailed data indicated that consumer spending and business investment were stronger than originally reported.

The annualized increase in inflation-adjusted gross domestic product stands in contrast to a 2.1% increase in the first quarter, as per the second estimate released on Wednesday by the Bureau of Economic Analysis.

Consumer spending, which accounts for over two-thirds of economic activity, rose at an annualized rate of 3.4%, surpassing the previously estimated 3.2% increase. Additionally, non-residential fixed investment surged at a pace of 8.5%.

A more refined measure of underlying demand, final sales to private domestic purchasers, saw a revised increase of 4.2% in the second quarter — the highest growth in over three years, compared to an initial estimate of 3.9%. This measurement excludes net exports, inventories, and government spending.

Government spending fell by an annualized 1% in the second quarter, primarily due to a significant reduction in nondefense-related expenditures.

On another note, the personal consumption expenditures price index, excluding food and energy, was adjusted upward to an annualized rate of 3.6% from the previous 3.4%. Additional data released Wednesday indicated a 0.2% rise in the core PCE price index in July compared to the prior month.

This report also indicated that there was no change in real consumer spending for the month, following stronger increases in the two months prior.

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