Economic growth in the United States in the second quarter of this year was stronger than expected, as activity proved resilient in the face of an aggressive interest rate hike campaign by the US Federal Reserve.
The world’s largest economy recorded growth of 2.4 percent annually between April and June, according to preliminary data published by the US Department of Commerce. This is an acceleration versus growth of two percent in the first quarter of 2023 and more than the 1.8 percent predicted by economists, reports the Financial Times.
Spending growth slowed after an unusually strong start to the year, but the decline was offset by strong business investment in inventories and fixed assets. Analysts point out visible signs of the economy’s resilience, especially in the private sector’s demand. They assess that there is still a desire to stimulate growth and consumption, although with more caution than before.
The economic growth data came a day after the US central bank raised interest rates to the highest level in 22 years to curb inflation.
The consumer price index fell from a peak of more than nine percent in June last year to three percent last month, while the unemployment rate remains near record lows and consumer confidence has improved.
The Economic Growth Was Not Accidental
Government spending boosted growth, with higher spending by state and local governments. Experts expect the increases to reflect initial stimulus from programs such as the Inflation Relief Act and the CHIP Act.
US President Joe Biden rejected the idea that the continued growth of the US economy was accidental. He pointed out that it is about economic growth from the bottom up. The president of the Fed, Jerome Powell, estimated that the main goal is the return of inflation to two percent without a significant drop that results in a significant loss of jobs.
