July 25, 2024
It looks like we can throw away the talk of a recession – at least for now. That’s because the US economy grew – again in the second quarter. That’s according to today’s gross domestic product report.
Now – I know lots of you are going to say these numbers aren’t real. These numbers don’t reflect what you feel in your everyday life. And those are valid feeling. It’s true most Americans feel that way. You aren’t alone. But regardless of how you feel – these numbers are used to determine America’s economic strength on the world stage – by the way – we are, far and away the country with the largest GDP – and these numbers are used by the federal reserve to determine when to increase and decrease interest rates. So you might want to pay attention to them too.
First — what’s GDP? The gross domestic product measures the total value of goods produced and services provided in a country during a single year.
In the second quarter of 2024 which is April to June, the GDP increased 2.8%. That’s double the GDP for the first quarter of this year and caps off seven straight quarters of increases.
The report found even though the Fed has kept interest rates at a 20-year high for almost a year — consumer spending on goods and services, business investment and new inventory all drove this US economic strength. So what were we spending on? The report said heath care, housing, recreation services, cars, furniture an household equipment. There was a slowdown in home construction and residential investment for the first time in three quarters.
Experts say this unexpected q-two increase isn’t expected to last long. I’ve been reporting about a slight cooling off of the jobs market, slowing inflation and I just reported in this video this week that experts believe the housing market is going to start cooling too. See — when everything is running so hot – that just feeds inflation. But the question is does this new surprisingly strong GDP report change the Dederal Reserve’s calculation about when they might cut interest rates? Just recently the Fed chair implied that those cuts could be coming soon – like September – but this new report may change the calculation. We’ll know more when the fed meets at the end of this month.
Read the GDP report here.
