The U.S. Bureau of Economic Analysis released more good economic news today.
Real gross domestic product (GDP) increased at an annual rate of 4.2 percent in the second quarter of 2018 … In the first quarter, real GDP increased 2.2 percent.
The graph shows it’s the strongest quarter since Q3 2014.
The U.S. economy grew at a strong 4.2 percent annual rate in the April-June quarter, the best showing in nearly four years, as growth stayed on track to produce its strongest gain in more than a decade. Strength in business investment offset slightly slower consumer spending…
Economists expect growth to slow to a still solid 3 percent annual rate the rest of the year, resulting in full-year growth of 3 percent for 2018, which would be the best performance since 2005, two years before the Great Recession began.
Business investment was particularly strong.
Wednesday’s GDP report showed that consumer spending, which accounts for about 70 percent of economic activity, expanded at a strong annual rate of 3.8 percent in the second quarter, down slightly from an initial estimate of 4 percent growth in consumer spending. But that downward revision was outweighed by other factors including stronger business investment, which grew at a 6.2 percent rate, driven by spending on such items as computer software.
The growth report nicely complements yesterday’s news that consumer confidence had climbed to an 18-year high, which the AP notes bodes well for increased spending.
The Conference Board reported Tuesday that its consumer confidence index rose to 133.4 in August, up from a reading 127.9 in July. It was the highest reading since confidence stood at 135.8 in October 2000.
Consumers’ confidence in their ability to get a job and the overall economy are seen as important indicators of how freely they will spend, especially on big-ticket items such as cars, in coming months. Consumer spending accounts for 70 percent of economic activity.