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GDP: US economy grows at 3% annualized pace in second quarter

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2 months ago

September 26, 2024

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GDP: US economy grows at 3% annualized pace in second quarter

The US economy grew at a 3% annualized pace in the second quarter, a faster rate than Wall Street had expected.

The Bureau of Economic Analysis’s third estimate of second quarter US gross domestic product (GDP ) was unchanged from the second estimate which had shown 3% annualized growth. Economists had estimated the reading to show annualized growth of 2.9%. The third estimate for second quarter GDP confirms that economic growth was higher than the 1.4% annualized growth seen in the first quarter.

“The revisions only strengthen our conviction that the US economy will continue to expand at a decent pace over the coming year, which suggests labor market conditions are unlikely to deteriorate markedly from here,” Oxford Economics deputy chief economist Michael Pearce wrote in a note to clients on Thursday.

Separately, data from the US Labor Department released Thursday showed 218,000 unemployment claims were filed in the week ending Sept. 21, below Wall Street’s expectations for 223,000. This marked the lowest level of weekly claims since the middle of May.

The data releases come a week after the Federal Reserve cut interest by half a percentage point in an effort to preserve what Fed Chair Powell described as an economy in “good shape.”

“[The economy is] growing at a solid pace. Inflation is coming down,” Powell said on Sept. 18 after the rate cut decision. “The labor market is in a strong place. We want to keep it there. That’s what we’re doing [by cutting interest rates].”

Thursday’s reading on GDP is considered backward looking given it’s an update to economic growth for a quarter that ended in June. But projections show the economy has been growing at a steady pace in the third quarter, which ends in September.

The Atlanta Fed GDPNow tracker currently projects the US economy is pacing for annualized growth of 2.9%. Meanwhile the economics team at Goldman Sachs is currently projecting the US economy grew at an annualized pace of 3% in the third quarter.