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The US economy expanded more than initially expected in the second quarter quarter this year, due to higher than estimated consumer spending, the Ministry of Finance reported yesterday. Department of Commerce.
The largest economy of the world grew at an annual rate of 3% between April and June, compared with 2.8% in the previous estimate.
“The update reflection mainly an upward revision of government spending consumers“the report said.
Unexpectedly high consumption – despite still high interest rates – has helped boost the American economy in recent times.
However, as the homes are depleting pandemic-era savings, consumption was expected to decline.
Consumer spending is “the main driver of the economy, almost 70% of GDP,” said Robert Frick, an economist at Navy Federal Credit Union.
In the latest revision, higher spending was partly offset by downward revisions in other areas, such as business investment, exports and government spending. Imports, on the other hand, were revised upwards..
For Frick, the United States had a “soft landing a few months ago,” meaning that the Federal Reservewith its high interest rate policy, managed to contain inflation without the country entering into recession.
But, “interest rate cuts are a long time coming.” The Fed raised its rates to the highest levels in more than two decades to make credit more expensive and discourage consumption and investment, and in this way, lowering pressures on prices.
The central bank signaled that it should lower its benchmark rates at the next monetary policy meeting, September 17th and 18thFears of a short-term economic slowdown loom large.
And the number of jobs created in USA was revised sharply downward for the fiscal year that ended at the end of March, a drop that can be explained exclusively by private sector data, according to the Commerce Department itself.
Preliminary data for the last fiscal year indicate that the US economy created 818,000 fewer jobs than previously reported.
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2024-09-05 07:01:38