U.S. economic growth surged in the second quarter, with GDP rising at an annualized rate of 2.8%, driven by strong consumer spending. The Federal Reserve’s decision on interest rates may be influenced by this figure.
A Commerce Department report detailed increased consumer spending on goods like automobiles, while public spending also contributed to GDP growth, despite a decline in real estate investment. Business investment is at its highest pace in a year, indicating ongoing economic growth.
The data supports the idea that the Federal Reserve can afford to wait before making any rate cuts, as private domestic demand remains robust. Core inflation, while lower than in previous quarters, remains a concern for central banks.
Despite the economic moderation compared to last year, controlled inflation and rising unemployment present challenges for the Fed in deciding when to cut rates. Sign up for our newsletter for more in-depth coverage.