U.S. Economy Grows Faster Than Expected in Second Quarter
The U.S. economy grew more quickly than expected in the second quarter of 2024, according to new government data released on Thursday. This growth is a positive sign for the economy after a slower start to the year. From April to June, the economy expanded by 2.8%, a significant increase from the 1.4% growth seen in the first three months of the year.
The Commerce Department’s report showed that this growth rate was much higher than the 1.9% increase that economists had predicted. The stronger performance in the second quarter was largely due to increased spending by consumers and businesses investing in their inventories. This means that people were buying more goods and companies were stocking up on supplies, helping to boost overall economic activity.
However, not all areas of the economy were performing well. The report noted a slowdown in investments in residential properties, such as new homes and renovations.
This decline was partly due to higher interest rates, which made borrowing more expensive. The Federal Reserve raised interest rates significantly in 2022 to control inflation, and these higher rates have been putting pressure on sectors like manufacturing and housing.
Despite these challenges, consumer spending has remained strong. One of the key reasons for this resilience is the robust job market. Many people are seeing their wages increase, and businesses are holding onto their employees despite economic uncertainties. This job stability is helping to sustain consumer spending, which in turn supports economic growth.
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The U.S. economy showed surprising strength in the second quarter of 2024, driven by consumer spending and business investments. While some sectors are struggling with high interest rates, the overall growth is a positive sign that the economy is still moving forward despite the challenges.
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