The US economy expanded at a stronger-than-estimated 2.2% annualised rate in the second quarter (2Q), powered by robust consumer spending and continued business investment in artificial intelligence (AI) infrastructure.
According to Reuters, the Commerce Department’s Bureau of Economic Analysis revised the 2Q GDP growth sharply higher from its previous estimate of 1.5%. Economists had expected the figure to remain unchanged.
The 1Q growth was also revised up to 2.5% from 2.1%.
Consumer spending, which accounts for more than two-thirds of US economic activity, grew at a 3.8% annualised pace in 2Q, up from an earlier estimate of 3.4% and significantly stronger than the 0.7% expansion recorded in 1Q.
Business spending on equipment maintained double-digit growth, supported by aggressive investment in AI-related infrastructure.
Underlying domestic demand also strengthened, with final sales to private domestic purchasers rising at a 4.6% rate, revised up from 4.2% and well above the 1Q’s revised 1.8% growth.
Measured from the income side, the economy grew at a revised 2.6% pace, reflecting strong corporate profits, while the average of GDP and gross domestic income increased 2.4%.
Despite the stronger economic performance, households face mounting pressure from higher inflation, particularly gasoline prices, while consumer confidence fell to a near 12-and-a-half-year low in September.
