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US economic growth blew past expectations in the second quarter, boosted by consumer spending and inventory building despite high interest rates, government data showed Thursday.
After a slow start this year, the world’s biggest economy grew at an annual rate of 2.8 percent in the April to June period, up from 1.4 percent in the first three months, said the Commerce Department.
The initial estimate was markedly above the 1.9 percent growth rate economists anticipated — a reassuring sign that consumption remains resilient.
President Joe Biden hailed the economy’s strength in a statement, adding 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, added: “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,” said the Commerce Department.
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.
