July 29, 2019
Consumer spending may have increased, but that didn’t keep the U.S. economy from sharply slowing in the second quarter. U.S. gross domestic product grew at a 2.1% annual rate Q2, down from a 3.1% gain in the first quarter, according to Commerce Department estimates.
The numbers for consumer spending accelerated to 4.3%, a growth rate that rebounded from a 1.1% annual gain in Q1. The increase was driven largely by auto sales. Household spending also experienced a resurgence, though it was offset by a widening trade deficit and slower business inventory rebuilding.
Business capital investment fell in Q2 for the first time in three years, a weakness economists note likely reflects trepidation by companies to pull the trigger on projects due to uncertainty surrounding the U.S. trade war with China.
The government reported current-dollar GDP increased 4.6%, or $239.1 billion, in the second quarter to a level of $21.34 trillion. In the first quarter, current-dollar GDP increased 3.9%, or $201.0 billion.
The price index for gross domestic purchases increased 2.2% in the second quarter, compared with an increase of 0.8% in Q1.
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