The Department of Commerce previously estimated that the country's Gross Domestic Product (GDP) total production of goods and services grew at a rate of 2.8% from April to June.
Growth in the second quarter marked a significant acceleration from the sluggish growth rate of 1.4% in the first three months of 2024.
Consumer spending, which accounts for about 70% of U.S. economic activity, rose at an annual rate of 2.9% last quarter, up from 2.3% in the government's earlier estimate. Business investment grew at a 7.5% rate, led by a 10.8% jump in investment in equipment.
Reports on Thursday reflected an economy that remains resilient despite a gradual slowdown under pressure from still high interest rates.
This economic situation greatly affects voters ahead of the presidential election in November. Many Americans remain frustrated by high prices even as inflation has eased since peaking at its highest level in four decades in mid-2022.
The Federal Reserve has raised its benchmark interest rate 11 times in 2022 and 2023, raising rates to their highest level in 23 years and helping to reduce annual inflation from a peak of 9.1% to 2.9% last month. The resulting higher borrowing costs for consumers and businesses are widely expected to cause a recession. But the economy continues to grow and employers continue to hire workers.
Now, with inflation only slightly above the Fed's 2% target level and possibly slowing, Chairman Jerome Powell has largely declared victory over inflation. As a result, the Fed is poised to start cutting its benchmark interest rate when it next meets in mid-September.
Prolonged periods of lower Fed rates are intended to achieve a "soft landing," in which the central bank successfully curbs inflation, maintains a healthy job market, and avoids recession. Lower rates for car loans, mortgages, and other forms of consumer loans are likely to follow.
The central bank has recently become more concerned about the job market, which is gradually weakening, than continuing to fight inflation. The unemployment rate has risen for four consecutive months, to 4.3%, still low by historical standards. Job opportunities and hiring rates have also declined, although they remain at relatively strong levels.
Thursday's report is the Commerce Department's second estimate of GDP growth in the April-June quarter. They will release their final estimate late next month.
