Stronger consumer spending accelerated the US economy in the second quarter, according to the Commerce Department’s first estimate of gross domestic product released Friday.
This preliminary report, based on incomplete data, showed that GDP increased by 2.6%, signaling that the growth slowdown in the first three months of this year was temporary.
It was forecast to show that economic growth rose at a 2.7% pace, according to Bloomberg. Growth in the first quarter was revised down to 1.2% from 1.4%.
Consumers did much of the heavy lifting in Q2 by increasing their spending, helped by a steady labor market. Personal consumption, which makes the biggest contribution to growth, rose by 2.8% as economists had expected.
Business spending, characterized as nonresidential fixed investment, also made a positive contribution to growth, as it increased by 5.2%. But spending on housing investment was notably weak, declining by 6.8%. The National Association of Homebuilders has repeatedly said land and labor shortages are limiting the pace of construction, even as the nation faces a shortage of affordable housing.
The Commerce Department also released its annual revisions of the past two years’ worth of GDP data. It showed that growth averaged a 2.2% pace from 2014 to 2016, up from 2.1%.