ICYMI: While House Republicans Root for Economy to Fail, GDP Surpasses Expectations

Today's GDP report was better than expected—including better than Republicans on the House Budget Committee expected. While House Republicans root for the economy to fail, the Biden-Harris economic agenda is delivering for hardworking families. Last quarter, the economy grew a strong 2.8%, with business investment up more than 5%, inflation down, and wages rising faster than prices. President Biden and Vice President will keep fighting to lower costs and grow the middle class—despite Republican obstruction and hopes for a downturn that would hurt families.

Read more below:

Semafor's Joseph Zeballos-Roig: Source flags what appears to be an accidental upload from House Budget GOP staff of proposed edits on their press release on today's GDP report.

Their release had 2.1% GDP Q2 growth as placeholder, but the actual reading came in at 2.8%

Axios: U.S. economy surprises with strong 2.8% growth rate in second quarter

[Courtenay Brown, 7/25/24]

The U.S. economy grew at a 2.8% annualized rate in the second quarter—a faster rate than economists expected as consumer spending increased and businesses built up inventories, the Commerce Department said on Thursday.

Why it matters: The new data raises confidence the economy has achieved a "soft landing" — healthy economic growth alongside cooling inflation.

Economists expected an annualized growth rate of 1.9% last quarter. The economy grew at a 1.4% rate in the first three months of the year.

Yahoo: GDP: US economy grows at faster than expected pace in second quarter as inflation eases

[Josh Schafer, 7/25/24]

The US economy grew at a faster than expected pace in the second quarter.

The Bureau of Economic Analysis's advance estimate of second quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 2.8% during the period, well above the 2% growth expected by economists surveyed by Bloomberg. The reading came in higher than first quarter GDP, which was revised down to 1.4%.

CNBC: U.S. economy grew at a 2.8% pace in the second quarter, much more than expected

[Jeff Cox, 7/25/24]

Economic activity in the U.S. was considerably stronger than expected during the second quarter, boosted by a strong consumer, government spending and a sizeable inventory build, according to an initial estimate Thursday from the Commerce Department.

Real gross domestic product, a measure of all the goods and services produced during the April-through-June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% rise in the first quarter.

Consumer spending helped propel the growth number higher, as did contributions from private inventory investment and nonresidential fixed investment, according to the first of three estimates the department will provide. […]

There was some good news on the inflation front: the personal consumption expenditures price index, a key measure for the Federal Reserve, increased 2.6% for the quarter, down from the 3.4% move in Q1. Excluding food and energy, core PCE prices, which the Fed focuses on even more as a longer-term inflation indicator, were up 2.9%, compared to a 3.7% increase in the prior period.

The so-called chain-weighted price index, which takes into account changes in consumer behavior, increased 2.3% for the quarter, below the 2.6% estimate.

Treasury Secretary Janet Yellen saw the GDP report as "affirming the path we're on to steady growth and declining inflation," in remarks she delivered Thursday morning in Rio de Janeiro.

CNN: The US economy is pulling off something historic

[Bryan Mena, 7/25/24]

The US economy is on the verge of an extremely rare achievement.

Economic growth in the first half of the year was solid, with the economy expanding a robust 2.8% annualized rate in the second quarter, according to fresh Commerce Department figures released Thursday, which are adjusted for inflation and seasonal swings.

Gross domestic product, the broadest measure of economic output, was much stronger in the second quarter than economists had predicted. The GDP report showed that businesses are continuing to invest and that consumers are still opening their wallets. That's key, because consumer spending is America's economic engine, accounting for about two-thirds of US economic output.

As the economy continued to expand from April through June, inflation resumed a downward trend and seems to be on track to slowing further toward the Federal Reserve's 2% target.

America's economy is about to stick what's called a "soft landing," which is when inflation returns to the Fed's target without a recession — a feat that's only happened once, during the 1990s, according to some economists.

Forbes: What Recession? U.S. Economy Shatters Forecasts For Quarterly GDP Growth

[Derek Saul, 7/25/24]

The economy grew by more than expected during the second quarter of this year, according to Bureau of Economic Analysis data released Thursday morning, as the U.S. defies yearslong concerns of a slowdown […]

Real gross domestic product, which tracks the inflation-adjusted total value of all goods and services produced in the U.S., grew by 2.8% in 2024's second quarter compared to the same period a year ago.

That is far better than consensus economist estimates of 2.1%, comfortably beating Q1's 1.4% economic expansion.

"The US economy is much stronger than people realize and to the extent that markets were worried about a growth slowdown, they should breathe a sigh of relief after this morning's GDP number," wrote Chris Zaccarelli, Independent Advisor Alliance's chief investment officer, in emailed comments.

Business Insider: The US economy grew way faster than expected this spring

[Madison Hoff, 7/25/24]

A new Bureau of Economic Analysis report said the advance estimate for US GDP growth in the second quarter was 2.8% at an annualized rate.

That's way more than the 2.0% forecast noted on Investing.com and the 1.4% growth in the first quarter.

"This is a perfect report for the Fed, growth during the first half of the year is not too hot, inflation continues to cool and the elusive soft landing scenario looks within reach," Olu Sonola, head of US economic research at Fitch Ratings, said in written commentary shared with Business Insider.

Bloomberg: US Economy Grew Faster Than Expected Last Quarter on Firm Demand

[Augusta Saraiva, 7/25/24]

US economic growth accelerated by more than forecast in the second quarter, illustrating demand is holding up under the weight of higher borrowing costs.

Gross domestic product increased at a 2.8% annualized rate in the April-June period after rising 1.4% in the previous quarter, the government's initial estimate showed. The economy's main growth engine — personal spending — advanced 2.3%, also more than projected.

New York Times: U.S. Economic Growth Accelerates, Outpacing Forecasts

[Ben Casselman, 7/25/24]

Economic growth picked up more than expected in the spring, as cooling inflation and a strong labor market allowed consumers to keep spending even as high interest rates weighed on their finances.

Gross domestic product, adjusted for inflation, increased at a 2.8 percent annual rate in the second quarter, the Commerce Department said on Thursday. […]

Consumer spending, the backbone of the U.S. economy, rose at a 2.3 percent annual rate in the second quarter — a solid pace, albeit much slower than in 2021, when businesses were reopening after pandemic-induced closings. Business investment in equipment rose at its fastest pace in more than two years. Inflation, which picked up unexpectedly at the start of the year, eased in the quarter. […]

"It's the perfect landing," said Sam Coffin, an economist at Morgan Stanley.

Wall Street Journal: Economic Growth Quickens, Rising at 2.8% Rate in Second Quarter

[Harriet Torry, 7/25/24]

The U.S. economy accelerated in the second quarter as consumers increased their spending, businesses invested more in equipment and stocked inventories, and inflation cooled.

Gross domestic product—the value of all goods and services produced in the U.S., adjusted for inflation and seasonality—rose at an annual rate of 2.8% for April through June to $22.9 trillion, the Commerce Department said Thursday.

That was faster than the 1.4% pace in the first quarter, and well above the 2.1% rate economists had expected. Household spending, the main driver of the U.S. economy, increased at a quicker pace as Americans' incomes continued to rise.

Washington Post: U.S. economy grew 2.8% in second quarter, a robust unexpected strengthening

[Abha Bhattarai, 7/25/24]

The U.S. economy grew at a surprisingly robust 2.8 percent annualized rate in the second quarter, capping two years of solid expansion, despite some signs of softening.

Gross domestic product for the quarter ending in June was double the 1.4 percent reading in the previous quarter, but reflects a general cool-down from last year's brisk pace, according to Commerce Department data released Thursday morning.

"Economic growth is solid, not too hot and not too cold," said Chris Rupkey, chief economist at Fwdbonds, a financial research firm. "The soft patch we had at the beginning of the year has gone away and with it, the risks of a recession are dying on the vine."