Below trend growth to continue
US GDP rose by 1.7% (annualized rate) in the June quarter, an improvement on the March quarter, but still only a modest rate of growth. The stronger growth largely reflected a pick-up in business investment and a much smaller detraction from growth from public demand.
US GDP in the June quarter grew by 0.4% qoq or at an annualised rate of 1.7%. While only a modest rate of growth, the result was above expectations and represents an acceleration of growth from the (downwardly revised) March quarter. Data since released suggest that there may be a small upwards revision when the second estimate of June quarter GDP is released late this month.
The stronger growth largely reflected a pick-up in business investment and a much smaller detraction from growth from public demand. Housing investment again grew strongly but consumption growth was weaker than in the previous quarter. Inventories again contributed to growth but there was a sizeable detraction from net exports due to a jump in import growth.
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