Faster consumer spending lifts Q2 GDP growth to 3.0%
Summary
Consumer spending propelled the economy to a 3.0% annualized growth rate in Q2, an upward revision that exceeded expectations. A rebound in profits growth recouped all the prior quarter's decline and then some to restore profits to a record high.
Consumer to rest of economy: I got this
With the benefit of additional data, the Commerce Department upwardly revised the annualized growth rate for the U.S. economy to 3.0% in the second quarter (chart). Most of the upward revision can be attributed to a more robust pace of consumer spending, which is now reported to have grown at a 2.9% annualized rate, up from 2.3% previously (chart). There is plenty of evidence that restrictive policy is weighing on the labor market and on construction, where revisions today revealed a more measured pace of structures investment and an outright decline in residential investment.
But with +1.95 percentage points of the overall 3.0% growth rate coming from consumer spending, it is less clear that higher-for-longer is posing a major impediment to household spending, no matter how much sentiment and confidence measures may say otherwise.
Author
Wells Fargo Research Team
Wells Fargo
