The nation’s economy accelerated last quarter at a strong 2.8% annual pace, the Associated Press reports, with consumers and businesses helping drive growth despite the pressure of continually high interest rates.
Today’s report from the Commerce Department said the gross domestic product — the economy’s total output of goods and services — picked up in the April–June quarter after growing at a 1.4% pace in the January–March period. Growth last quarter also picked up because businesses increased their inventories. Economists had expected a weaker 1.9% annual pace of growth.
Despite last quarter’s uptick, the U.S. economy, the world’s largest, has cooled in the face of the highest borrowing rates in decades, engineered by the Federal Reserve to fight high inflation. From mid-2022 through 2023, annualized GDP growth had topped 2% for six straight quarters. In last year’s final two quarters, GDP expanded by robust rates of 4.9% and 3.4%.
Fed officials have made clear that with inflation slowing toward their 2% target level, they’re prepared to start cutting rates soon, something they’re widely expected to do in September.
