US economy posts surprise 2.4% growth in second quarter

The rise in GDP "reflected increases in consumer spending, nonresidential fixed investment, state and local government spending," among other areas, said the Commerce Department (Representative Image)

The US economy defied expectations to see growth pick up in the second quarter, according to government data released Thursday, boosted by some forms of investment and stronger consumer spending than expected.

GDP growth in the world's biggest economy came in at an annual rate of 2.4 percent for the April-June period, said the Commerce Department, despite analyst expectations of a slower rate.

This was also an increase from the two percent rate in the first three months of 2023.

Although economists have been warning of a potential slowdown as the US central bank raised interest rates rapidly in the last year to tamp down demand and lower inflation, the economy has proven more resilient than expected.

In the first quarter, GDP growth was revised sharply higher to two percent -- from an initial estimate of 1.1 percent –- boosted by a stronger-than-anticipated consumer.

On Thursday, the rise in GDP "reflected increases in consumer spending, nonresidential fixed investment, state and local government spending," among other areas, said the Commerce Department in a statement.

But while there was an "upturn in private inventory investment and an acceleration in nonresidential fixed investment," contributing to the acceleration in GDP growth, this was partly offset by a downturn in exports and decelerations in consumer spending as well as in government spending.