The U.S. economy grew at an annual pace of 2.8 percent in the second quarter, much faster than the two percent forecast by Wall Street analysts.
The stronger-than-expected growth indicates that the economy has continued to expand despite high interest rates, calling into question the need for a rate cut from the Federal Reserve in the near term.
In the first quarter of the year, growth slowed to 1.4 percent after rapidly growing in the second half of 2023.
Consumer spending—the main engine of economic growth—rose 2.3 percent, beating forecasts, according to data released by the Department of Commerce on Thursday.
Business fixed investment rose at a brisk 3.6 percent. Government spending jumped at a 3.1 percent pace.
Inflation slowed but not by as much as expected. The annual rate of core personal consumption expenditures inflation fell to 2.9 percent in the second quarter, down from 3.7 percent in the first quarter. Economists had forecast a fall to 2.7 percent.
