Gross domestic product increased at an annual rate of 3 percent in the second quarter of the year, according to the U.S. Bureau of Economic Analysis. The increase followed a 1.4 percent rise in the first quarter.
The increase in GDP was higher than the 2.8 percent estimated by the Commerce Department and was sparked by increases in consumer spending, nonresidential fixed investments and private inventory investments. Consumer spending increased 2.9 percent, which was higher than the 2.3 percent initial government projection. Business investment increased 7.5 percent, sparked by a nearly 11 percent increase in equipment.
The report was released as Federal Reserve Chair Jerome Powell expressed support for an interest rate cut during next month’s Federal Open Market Committee meeting. Speaking during the Jackson Hole Economic Policy Symposium in Wyoming, Powell did not commit to an interest rate cut but said “the time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.”
There was $686.4 billion in personal savings in the second quarter, according to the Bureau of Economic Analyses. The personal savings rate — personal savings as a percentage of disposable personal income — was 3.3 percent in the second quarter.
The price index for gross domestic purchases increased 2.4 percent in the second quarter, while the personal consumption expenditures index increased 2.5 percent. Not including food and energy prices, the PCE price index increased 2.8 percent.
Other report findings included:
- Real gross domestic income increased 1.3 percent, equal to the first quarter.
- Profits from current production increased $57.6 billion, up from a $47.1 billion increase in the first quarter.
- Profits of domestic financial corporations increased $46.4 billion, down from a $65 billion increase in the first quarter.
- Domestic nonfinancial company profits increased $29.2 billion, after falling $114.5 billion the previous quarter.
