US GDP grew at a 2.1% rate between April and June, the US governement said on Thursday.
ADVERTISEMENTThe economic output in the second quarter slowed down from the first when the GDP expanded by 2.2% compared to the previous year.
Consumer spending, business investment, and state and local government outlays drove the second-quarter economic expansion.
The economy and job market have shown surprising resilience even though the Federal Reserve (the US equivalent of a federal central bank) has dramatically raised interest rates to combat inflation, which last year hit a four-decade high.
The Fed has raised its benchmark rate 11 times since mid-March 2022, leading to concerns that ever-higher borrowing rates will trigger a recession.
Consumer spending rose at an annual rate of just 0.8% from April through June, down sharply from the government's previous estimate of 1.7% and the weakest figure since the first quarter of 2022.
Encouraging signs for the US economy
But business investment excluding housing, a closely watched barometer, rose at a 7.4% annual pace, the fastest rate in more than a year. State and local government spending and investment jumped 4.7%, the biggest such quarterly gain since 2019.
Growth is believed to be accelerating in the current July-September quarter, fuelled by consumption. Business investment is also thought to have remained solid.
Economists have estimated that the economy expanded at a roughly 3.2% annual rate in the third quarter, which would be the fastest quarterly growth in a year.
