U.S. Economy Beats Growth Expectations In 2Q

US economic growth exceeded expectations in the second quarter, driven by consumer spending and inventory building despite high interest rates.

Consumption has been stronger than analysts expected.

The economy grew at an annual rate of 2.8 percent in the second quarter, up from 1.4 percent in the first three months, the Commerce Department announced, according to Agence France-Presse (AFP).

The initial estimate was significantly above the 1.9 percent growth rate economists anticipated, signaling that consumption remains resilient.

President Joe Biden hailed the economy's strength in a statement, while noting he had "more to do" in his last six months in the White House.

Biden, who endorsed Vice President Kamala Harris after his historic decision to drop out of the 2024 election, stated, "The Vice President and I will keep fighting for America's future."

The acceleration "primarily reflected an upturn in private inventory investment and an acceleration in consumer spending," the Commerce Department reported. This was "partly offset by a downturn in residential fixed investment," it added.

While sectors like manufacturing and housing have been struggling after the Federal Reserve rapidly hiked interest rates in 2022 to combat surging inflation, consumption has been stronger than analysts expected.