Breaking: US economy grows by 6.5% in Q2 vs. 8.5% expected
|The United States' Real Gross Domestic Product (GDP) expanded at an annual rate of 6.5% in the second quarter of 2021, the US Bureau of Economic Analysis first estimate showed on Thursday. This reading missed the market expectation for a growth of 8.5% by a wide margin.
Follow our live coverage of the US GDP report and the market reaction.
Market reaction
The USD came under renewed selling pressure after the disappointing GDP print and the US Dollar Index was last seen trading at its lowest level in a month at 91.94, losing 0.35% on a daily basis.
Key takeaways from the press release
"The increase in real GDP in the second quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, exports, and state and local government spending that were partly offset by decreases in private inventory investment, residential fixed investment, and federal government spending."
"Imports, which are a subtraction in the calculation of GDP, increased."
"The increase in second quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic."
"In the second quarter, government assistance payments in the form of loans to businesses and grants to state and local governments increased, while social benefits to households, such as the direct economic impact payments, declined."
"The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter because the impacts are generally embedded in source data and cannot be separately identified."
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