GDP Report Shows U.S. Economy Grew 2.4% in Second Quarter

The U.S. economy grew at a 2.4% annual rate last quarter, remaining well clear of a recession despite higher rates

Economists surveyed by The Wall Street Journal had estimated gross domestic product grew at an annual rate of 2% in the second quarter.

Strong consumer spending—which accounts for about two-thirds of economic output—has been fueling the U.S. economy, amid easing inflation and a tight labor market.

Economists are dialing back their recession expectations after many had projected a downturn would start in the middle of the year in response to Federal Reserve policy. The Fed acted to raise its benchmark interest rate to a 22-year high on Wednesday. Chair Jerome Powell didn’t rule out another increase, but emphasized the amount of time it can take for higher interest rates to cool inflation. 

“We’ve turned the corner on the risk here, and instead of being heavily weighted to recession, it’s balanced between recession and not recession,” said Amy Crews Cutts, chief economist at AC Cutts & Associates, before the data was released.