The US economy expanded at a robust 3% annual rate in the second quarter of 2024, driven by strong consumer spending and business investment, the government announced on Thursday.
The growth rate has surpassed the estimates made by the Commerce Department, which had initially reported a 2.8% growth in the nation’s gross domestic product (GDP) from April to June.
This second-quarter surge is a significant increase from the 1.4% growth rate in Q1 2024.
Consumer spending, responsible for about 70% of U.S. economic activity, rose at a 2.9% annual rate last quarter, up from the earlier estimate of 2.3%. Business investment saw a notable increase at a 7.5% rate, highlighted by a 10.8% rise in equipment investment.
The latest GDP estimate for the April-June period also showed easing inflation, though it remains slightly above the Federal Reserve’s 2% target.
The personal consumption expenditures index (PCE), the central bank’s preferred inflation measure, rose at a 2.5% annual rate last quarter, down from 3.4% in the first quarter. Core PCE inflation, which excludes volatile food and energy prices, increased at a 2.7% rate, a decrease from 3.2% in the first quarter.
Both PCE inflation figures showed a slight improvement from the initial government estimate.