U.S. Outlook: Economy runs hot in the second quarter

Scott Anderson
Posted by Scott Anderson
Chief Economist

Second quarter real GDP pierced the 4.0% barrier, as we expected, with the advance estimate from the BEA coming in at a sizzling 4.1%.

Busy, crowded street scene in Times Square, NYCThe above-trend growth was driven by a number of factors.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on July 27.

Key observations:
  • Consumer spending alone was responsible for 2.7 percentage points of the 4.1% gain in U.S. real GDP growth last quarter.
  • We forecast real consumer spending growth of around 2.4% annualized in the third quarter.
  • GDP growth would have been a lot stronger last quarter if there weren’t a big drop in business inventories.
  • Bottom line: The 4.1% Q2 GDP print was impressive, but not sustainable in the quarters ahead.

Read my full report.

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