U.S. Economic Growth Accelerates in Q2

WASHINGTON (Reuters) – U.S. economic growth accelerated in the second quarter, driven by strong consumer spending, as confirmed by the government on Thursday.

Gross domestic product (GDP) increased at an unrevised 3.0% annualized rate last quarter, according to the Commerce Department's Bureau of Economic Analysis in its third estimate of second-quarter GDP. Economists surveyed by Reuters had expected GDP to remain unchanged at a 3.0% pace.

Additionally, growth in the first quarter was revised upwards to a 1.6% rate from the previously reported 1.4%.

The government also revised national accounts data from the first quarter of 2019 through to the first quarter of 2024, indicating that economic growth and corporate profits were stronger in 2023 than previously estimated. This revision has narrowed the gap between GDP and gross domestic income (GDI), an alternative measure of economic performance. Some economists suggested that the prior gap implied GDP was overstating the economy's health.

GDI, which measures economic activity from the income side, rose at a revised 3.4% rate last quarter, up from an initially estimated 1.3%. It posted an upwardly revised 3.0% growth rate in the January-March quarter as well. GDI had initially been reported at a 1.3% increase in the first quarter.

In theory, GDP and GDI should be equivalent; however, discrepancies arise because they are based on different and mostly independent source data.

The average of GDP and GDI, known as gross domestic output (GDO) and viewed as a more accurate indicator of economic activity, increased at a rate of 3.2% last quarter, revised from an earlier estimate of 2.1%. GDO also advanced at a revised pace of 2.3% in the first quarter, up from the previously reported 1.4% rate.