US Q2 GDP: At 2.8%, US economy beats estimates on robust consumer spending; Wall Street lifts Fed rate cut bets

US Q2 GDP: The United States of America's real gross domestic product (GDP) increased at a rate of 2.8 per cent for the April to June quarter of the financial year 2024-25, according to data released by the US Bureau of Economic Analysis.

The increase in the real GDP is reflected in the increase in consumer spending on goods and services with a key focus on health care, housing and utilities, and recreation services, according to the government release.

In the goods segment, this growth was fueled by motor vehicles and parts, recreational goods and vehicles, furnishings and durable household equipment, and gasoline and other energy goods, as per the data.

The current dollar GDP increased by 5.2 per cent annually, or $360 billion in the second quarter to $28.63 trillion. The GDP increased by 4.5 per cent or $312.2 billion in the first quarter of the calendar year 2024.

The price index for the gross value of domestic purchases rose 2.3 per cent in the second quarter as compared to a 3.1 per cent increase in the first quarter. Personal consumption expenditure (PCE) rose 2.6 per cent as compared to a 3.4 increase in the last quarter. The PCE price index rose 2.9 per cent as compared to a 3.7 per cent increase in the last quarter, according to the US government data release.

The economic acceleration "primarily reflected an upturn in private inventory investment and an acceleration in consumer spending," said the Department of Commerce. "Partly offset by a downturn in residential fixed investment," they said.

"We see consumption continuing to be the engine of the economy, continuing to keep economic growth on a relatively strong growth path of around two per cent," Matthew Martin economist at Oxford Economics told AFP.

It is a big case to begin cutting the rate in September and follow up with every other meeting from here, he told AFP about the US Federal Reserve's rate-cutting policy.