The United States economy experienced significant growth in the second quarter of 2024, with the Gross Domestic Product (GDP) increasing at an annual rate of 2.8%. This is a marked improvement from the first quarter, which saw a GDP increase of 1.4%, according to the U.S. Bureau of Economic Analysis.

The GDP growth primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investment. The increase in consumer spending was driven by both services and goods, with health care, housing and utilities, and recreation services leading the way in the services sector. In the goods sector, motor vehicles and parts, recreational goods and vehicles, furnishings and durable household equipment, and gasoline and other energy goods were the leading contributors.

The increase in private inventory investment was largely due to increases in the wholesale trade and retail trade industries, which were partly offset by a decrease in the mining, utilities, and construction industries. Nonresidential fixed investment saw increases in equipment and intellectual property products, which were partly offset by a decrease in structures.

The GDP growth in the second quarter was primarily due to an upturn in private inventory investment and an acceleration in consumer spending. However, these movements were partly offset by a downturn in residential fixed investment.

Current-dollar GDP increased 5.2 percent at an annual rate, or $360.0 billion, in the second quarter to a level of $28.63 trillion. In the first quarter, GDP increased 4.5 percent, or $312.2 billion.

The price index for gross domestic purchases increased 2.3 percent in the second quarter, compared with an increase of 3.1 percent in the first quarter. The personal consumption expenditures (PCE) price index increased 2.6 percent, compared with an increase of 3.4 percent. Excluding food and energy prices, the PCE price index increased 2.9 percent, compared with an increase of 3.7 percent.

The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2024.

Mike McConnell