The US economy unexpectedly accelerated to a 2.4% growth rate in the April-June quarter of 2023, according to the Commerce Department. This was well above the 1.5% growth rate that economists had forecast.
The growth was driven by a number of factors, including strong consumer spending and business investment. Consumer spending, which accounts for about 70% of US economic activity, rose at a 1.6% annual rate in the second quarter. This was the slowest pace of growth since the first quarter of 2022, but it was still above economists' expectations.
Business investment also rose at a strong pace in the second quarter, increasing at a 7.7% annual rate. This was the fastest pace of growth since early 2022. The increase in business investment was driven by spending on equipment and software.
The strong growth in the second quarter was a surprise to economists, who had expected the economy to slow down in the face of rising interest rates. The Federal Reserve has raised interest rates six times since March 2022 in an effort to cool inflation. However, the latest data suggests that the economy is still growing at a healthy pace.
It remains to be seen whether the economy can sustain this growth in the coming months. The Fed is expected to continue raising interest rates, which could weigh on economic growth. However, other factors, such as strong consumer spending and business investment, could help to offset the impact of higher interest rates.
Overall, the strong growth in the second quarter is a positive sign for the US economy. However, it remains to be seen whether the economy can sustain this growth in the face of rising interest rates.
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