(The Center Square) – Gross domestic product rose at an annual rate of 3% in the second quarter of 2024, showing economic growth and increased consumer spending, according to a report.
The report, released by the U.S. Bureau of Economic Analysis, shows gross domestic product over the last five years.
When adjusted for inflation, the real gross domestic product has grown faster since 2021 than originally thought, according to the third estimate, where it increased at an annual rate of 3% in the second quarter of 2024.
The first quarter of 2024’s real GDP is now estimated to have increased 1.6%, a revision from the previously published estimate of 1.4%. According to the website, each quarter’s GDP is estimated over three consecutive months: advance, second, and third.
The increase is due to lowering inflation, stronger labor markets, and heightened consumer spending, according to the report.
As previously reported by The Center Square, while headline inflation has let up, partly due to improvements in supply chain issues, core inflation has also moved lower along with cooling aggregate demand.
The next release is Oct. 30.
The Federal Reserve began raising interest rates two years ago to address high inflation while holding the federal funds rate at a restrictive level.
“In recent months, we have seen some further progress on slowing the pace of inflation, with monthly readings lower than the elevated pace seen in the first three months of the year,” Michelle Bowman, head of the Federal Resesrve’s Board of Governors, said in a speech Thursday.
Bowman said while reports show consumer spending appears resilient, the decline in restaurant spending since the previous year is evident.
She continued, “Prices remain much higher than before the pandemic, which continues to weigh on consumer sentiment. Higher prices have an outsized effect on lower- and moderate-income households, as these households devote a significantly larger share of income to food, energy, and housing. Prices for these spending categories have far outpaced overall inflation over the past few years.”
