According to the Associated Press, the government said today that the U.S. economy grew at a 2.1% annual pace from April– June, extending its sturdy performance in the face of higher interest rates. That leaves the government’s previous estimate unchanged.
The second-quarter expansion of the nation’s gross domestic product — its total output of goods and services — marked a modest deceleration with revised 2.2% annual growth from January–March.
Consumer spending, business investment, and state and local governments drove the second-quarter economic expansion.
Growth is believed to be accelerating in the current July–September quarter, fueled by still-free-spending consumers. Economists have estimated that the economy expanded at a roughly 3.2% annual rate in the third quarter, which would be the fastest quarterly growth in a year. Even more optimistic estimates have projected that growth from July–September exceeded a 4% annual rate, according to the Federal Reserve Bank of Atlanta.
Even so, the acceleration in growth isn’t likely to endure. The economy is expected to weaken in the final three months of the year. Hiring and income growth are slowing, and economists think the savings that many Americans amassed during the pandemic from federal stimulus checks will have evaporated by next quarter.
