Economic activity in the U.S. increased in line with economist estimates in the second quarter, according to a report released by the Commerce Department on Friday.
The report said real gross domestic product climbed by 2.6 percent in the second quarter after rising by a downwardly revised 1.2 percent in the first quarter.
Economists had expected GDP to increase by 2.6 percent in the second quarter compared to the 1.4 percent growth that had been reported for the previous quarter.
The Commerce Department said the GDP growth in the second quarter reflected positive contributions from consumer spending, non-residential fixed investment, exports, and federal government spending.
Consumer spending jumped by 2.8 percent in the second quarter compared to the 1.9 percent increase in the first quarter.
Meanwhile, the increase in GDP was limited by negative contributions from private residential fixed investment, private inventory investment, and state and local government spending.
Andrew Hunter, U.S. economist at Capital Economics, said, "Looking ahead, the strengthening labor market should continue to support real consumption growth, while the business surveys remain at a high level and suggest that investment will continue to recover."
"Accordingly, we still expect GDP growth of 2.5%-3.0% over the rest of this year which, along with the declining unemployment rate, should leave the Fed on track to raise interest rates once more before year-end," he added.
A reading on core consumer prices, which exclude food and energy prices, showed that the pace of price growth slowed to 0.9 percent in the second quarter from 1.8 percent in the first quarter.
by RTT Staff Writer
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