US GDP Growth Accelerates In Q2

Forex News

Growth of the US gross domestic product accelerated in the second quarter, confirming possibility of faster pace of rate hikes of the Fed. Data from the US Bureau of Economic Analysis showed, that GDP grew at a solid 4.1% pace in the second quarter, matching the forecasts of economists. The figure was up from 2.2% expansion registered in the first quarter of 2018 and is the fastest rate of growth since the third quarter of 2014. Growth was led by a jump in consumer spending from the first quarter, as well as a surge in exports.

Compared with a year earlier, second-quarter GDP rose 2.8%, just shy of the 3% mark, which was last reached in 2015. The Trump administration's official goal is for sustained GDP growth of 3%, which would well exceed the average 2.2% pace during this expansion and the Fed's longer-run expectation of 1.8%.

The pace of expansion in consumer spending, which accounts for about 70% of the economy, exceeded projections for 3% and contributed 2.69% to growth. Price data in the report indicated that inflation was in line with the Fed's goal. Excluding food and energy, the central bank's preferred price index rose at a 2% annualized rate last quarter, following 2.2% in the first three months of the year.