Updated Jul 27, 2023, 10:48am EDT
businessNorth America

U.S. economic growth speeds up

Shoppers on 5th Avenue pass by the Bergdorf Goodman store in New York City.
REUTERS/Brendan McDermid/File Photo

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The News

The U.S. economy grew at a faster rate than expected over the last few months, with gross domestic product increasing by 2.4% in the last quarter.

The new numbers come a day after U.S. Federal Reserve Chair Jerome Powell said staff at the Fed no longer forecast a recession in the U.S.

We’ve curated insightful analysis from experts about what the GDP figures show about the state of the U.S. economy.

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  • “The latest numbers put an exclamation mark on it: we’re not in a recession and it’s unlikely we’ll slip into one this year or maybe even next year,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a statement. But he pointed out that nearly half of Americans already think we’re in a recession, “and given the effects of inflation, that makes sense.”
  • The economic growth surpassed expectations in part because of high consumer spending on things like travel, cars, and tickets, The Wall Street Journal reported. But it’s unclear whether that trend will continue through the rest of this year, as high interest rates persist and student loan repayments resume. “There are a lot of canary-in-the-coal-mine signs that we’re due for a slowdown in consumer spending,” Brett Ryan, senior U.S. economist at Deutsche Bank Securities, told the Journal.
  • The economy grew despite recent interest rate hikes by the Fed that are aimed at tackling inflation. Steve Rick, chief economist at TruStage, told CNBC that “it’s encouraging to see the aggressive hike cycle working as inflation continues to decline.” Inflation dropped to its lowest annual rate in over two years last month, recent data showed.
  • Meanwhile, the European Central Bank hiked interest rates for the ninth consecutive time on Thursday, as ECB President Christine Lagarde said the economic outlook in the eurozone has ”deteriorated" amid high inflation. “Inflation continues to decline but is still expected to remain too high for too long,” Lagarde said at a press conference.