WASHINGTON: The U.S. economy grew at its fastest pace in two and a half years in the second quarter with all sectors contributing to the jump in output in a bullish signal for the remainder of the year.
The Commerce Department Friday raised its estimate of gross domestic product to show the economy expanded at a 4.6 percent annual rate. That was in line with Wall Street’s expectations.
The best performance since the fourth quarter of 2011 reflected a faster pace of business spending and sturdier export growth than previously estimated.
But consumer spending, which accounts for more than two-thirds of U.S. economic activity, was unrevised as stronger health care outlays were offset by weaknesses in recreation and durable goods spending.
With domestic demand increasing at its fastest pace since 2010, the economic recovery appeared more durable after growth slumped in the first quarter because of an unusually cold winter.
So far, economic data such as manufacturing, trade and housing suggest that much of the second-quarter momentum spilled over into the third quarter. Growth estimates for the July-September quarter range as high as a 3.6 percent pace.
Second-quarter GDP was previously estimated to have advanced at a 4.2 percent rate. The economy contracted at a 2.1 percent pace in the first quarter.
The dollar extended gains against a basket of currencies on the report.
U.S. stock index futures were little changed.
The strong growth pace and domestic demand growth help to explain the robust job gains during the quarter, as well as the sharp decline in the unemployment rate.
When measured from the income side, the economy grew at a robust 5.2 percent pace, revised up from the previously reported 4.7 percent rate.
Business spending on equipment was raised to an 11.2 percent pace from a 10.7 percent rate. Businesses also invested more in nonresidential structures, such as gas drilling, as well as in research and development.
Businesses accumulated $84.8 billion worth of inventory in the second quarter, a bit more than the previously reported $83.9 billion. That saw restocking contributing 1.42 percentage points to GDP growth rather than 1.39 percentage points.
Still, there is little sign of an inventory overhang, a positive signal for third-quarter GDP growth.
Growth in consumer spending was unrevised at a 2.5 percent rate in the second quarter.
Though trade was a drag for a second consecutive quarter, export growth was raised to an 11.1 percent pace, the fastest since the fourth quarter of 2010, from a 10.1 percent rate.
Housing market-related spending was revised up as was government spending. Corporate profits rebounded a bit more strongly than previously reported from a decline in the first quarter that had been spurred by the expiration of a depreciation bonus.
Very strong result with keeps getting revised up. 3rd quarter growth is likely also going to be around 4%. Look to see further strong employment numbers in the coming months. If 3rd quarter growth is strong like expected. I would expect to see US rates rise by end of the year or early 2015.
Very strong result with keeps getting revised up. 3rd quarter growth is likely also going to be around 4%. Look to see further strong employment numbers in the coming months. If 3rd quarter growth is strong like expected. I would expect to see US rates rise by end of the year or early 2015.
Growth this strong needs rising interest rates.
Yes Mike.
And could you give us a chart showing how much new government debt is required for each dollar of GDP growth?
That would be really interesting.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Very strong result with keeps getting revised up. 3rd quarter growth is likely also going to be around 4%. Look to see further strong employment numbers in the coming months. If 3rd quarter growth is strong like expected. I would expect to see US rates rise by end of the year or early 2015.
Growth this strong needs rising interest rates.
Have you not worked it out yet? The better the US does, the more Australia suffers. Your praying for your funeral Mike.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Have you not worked it out yet? The better the US does, the more Australia suffers. Your praying for your funeral Mike.
Why do you say that? In the short term, sure our stock market sells off as the $US rises in relative value, but longer term a strong US economy drives economic growth here as well - has always been thus! ;-)
For Aussie property bears, "denial", is not just a long river in North Africa.....
Why do you say that? In the short term, sure our stock market sells off as the $US rises in relative value, but longer term a strong US economy drives economic growth here as well - has always been thus! ;-)
No actually, Australia's focus has changed. Add that to everyone seeing the US as a customer rather than competition. Watch where the money flows.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Have you not worked it out yet? The better the US does, the more Australia suffers. Your praying for your funeral Mike.
I have talked about this for 2 years now while most bears said it would not happen send yet here we are. You are too short sighted in your views and underestimated the global impact a strongly growing US economy will have on the global economy.
Have you not worked it out yet? The better the US does, the more Australia suffers. Your praying for your funeral Mike.
Maap. Wrong. The US is the second biggest customer for our customers (after the Eurozone). Not to mention that the US is itself one of our big customers. A strong US economy is a huge help for the Australian economy.
The main issue is that a strong US economy means a strong US dollar which is inflationary for the Australian economy.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Why do you say that? In the short term, sure our stock market sells off as the $US rises in relative value, but longer term a strong US economy drives economic growth here as well - has always been thus! ;-)
Spot on.
I don't think Newjez and many bears fully grasp what has been unfolding I the US in recent years. I have talked about at length only to be told I was wrong by so many bears, yet they were wrong and I called it correct. Time will tell how strong a growth phase will unfold but I am almost prepared to declare the US will be in an economic Boom in the near future if it is not already in the start of one. The bears will say no once again yet in a years time I will still be correct.
miw
27 Sep 2014, 07:09 PM
Maap. Wrong. The US is the second biggest customer for our customers (after the Eurozone). Not to mention that the US is itself one of our big customers. A strong US economy is a huge help for the Australian economy.
The main issue is that a strong US economy means a strong US dollar which is inflationary for the Australian economy.
Some here seem to underestimate the economic impact a strongly growing superpower will have on the global economy.
As I have said prior a huge geo-strategic shift is taking place back in favour of the US, just most cannot or will not see it until it hits them in the face. It is an unstoppable change at this point and it's impact will be felt over the next few decades.
In 5 years from now, talk won't be of a China but on how much the world got it wrong when predicting the demise of the USA.
Maap. Wrong. The US is the second biggest customer for our customers (after the Eurozone). Not to mention that the US is itself one of our big customers. A strong US economy is a huge help for the Australian economy.
The main issue is that a strong US economy means a strong US dollar which is inflationary for the Australian economy.
Even a dropping AUD is good for the competitiveness of our exports eg all the new LNG coming online. It will also allow local companies and produce to compete better with overseas imports.
We used to say if the US sneezes the rest of the world catches pneumonia. Other economies have risen in influence but a strong US economy is still a fillip for the world economy.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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