The advance estimate of US GDP growth in Q2 2024 showed a robust 2.8% annualized increase, significantly exceeding the anticipated 2.0% and doubling Q1’s pace of 1.4%.
This stronger-than-expected growth was driven by rises in consumer spending, private inventory investment, and nonresidential fixed investment. Notably, imports also increased, which are subtracted in the GDP calculation.
On the inflation front, GDP price index slowed from 3.1% to 2.3%, falling below the expected 2.6%. PCE price index also eased from 3.4% to 2.6%, and core PCE price index saw a notable decrease from 3.7% to 2.9%.
The sharp uptick in GDP growth, coupled with cooling inflation metrics, presents an optimistic economic outlook. Deceleration in price indexes suggests easing inflationary pressures, which would support rate cut by Fed in the coming months.
