What to Expect From This Week's Report on US Economic Growth?

Despite signs of a slowdown successful caller weeks, economical maturation apt remained unchangeable done nan extremity of nan 2nd quarter.

Economists surveyed by Dow Jones Newswires and The Wall Street Journal expect gross home merchandise (GDP) grew to an annualized 1.9% successful nan 2nd quarter. The intimately watched information will beryllium released from nan Bureau of Economic Analysis connected Thursday.

If estimates clasp true, that would beryllium higher than nan first 4th but still subdued from nan 2nd half of past year.

"It would besides beryllium accordant pinch an system expanding astatine a gait modestly beneath its estimated imaginable and accordant pinch nan disinflation observed successful nan first half of 2024," wrote Moody's Analytics Economist Matt Colyar.

Economic activity has moderated and ostentation has declined arsenic nan Federal Reserve has kept its benchmark lending complaint astatine a 23-year precocious for nan past year. Expectations person grown that nan Fed will soon commencement cutting nan fed costs rate, but officials astatine nan cardinal slope opportunity they are watching economical information for more grounds that inflation is intelligibly headed toward nan Fed's 2% yearly target.

What Fueled Growth successful nan Second Quarter?

A fewer corners of nan system are giving GDP a lift.

Inventory levels, which economists opportunity are notoriously volatile and difficult to predict, apt boosted nan 2nd quarter's measurement of economical growth. Durable equipment orders, specified arsenic dense instrumentality for business, besides showed signs of maturation during that time.

However, nary assemblage has been arsenic influential connected nan economy's maturation successful nan past fewer years arsenic consumers' spending—and nan 2nd 4th will beryllium nary different, economists said.

Consumers person continued to walk contempt inflationary value pressures and elevated costs of borrowing—helping nan system debar a recession that many thought would hap past year. Economists truthful acold this twelvemonth person thought consumers would falter arsenic pandemic-era savings ran out.

Consumer Spending Remains Stalwart

However, nan 2nd 4th was amended than anticipated, culminating successful a astonishing June study that showed small alteration contempt economists' expectations that spending would decline.

"Consumer spending is obscurity adjacent a freefall," wrote Wells Fargo economists.

Consumers still person important trends moving successful their favor, said Scott Anderson, main U.S. economist astatine BMO.

"Among nan astir important tailwinds successful our position are record-high family wealth, rising existent disposable income, and still historically debased levels of unemployment," Anderson wrote. "We could moreover spot nan resistance of higher liking rates statesman to slice complete time, mounting nan system up for a maturation revival and a much tolerable ostentation complaint successful 2025."

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