by Sho Chandra | Bloomberg
The world’s largest economy expanded at a faster pace in the second quarter and managed to eke out a gain at the start of the year, painting a picture of incremental progress consistent with the Federal Reserve’s view.
Gross domestic product rose at a 2.3 percent annualized rate, and a revised 0.6 percent advance in the first quarter wiped out a previously reported contraction, Commerce Department data showed Thursday in Washington. The median forecast of 80 economists surveyed by Bloomberg called for a 2.5 percent gain. Consumer spending grew more than projected, and price increases accelerated.
The economy has moved beyond some of the early 2015 constraints including weather and port delays, while cooling global markets, a strong dollar and insufficient wage gains may continue to limit growth. Fed officials, considering when to begin raising rates this year, concluded on Wednesday that the U.S. is making progress.
“We had better growth and better inflation in the first half,” said Eric Green, head of U.S. economic research at TD Securities in New York. “This should make the Fed feel more comfortable about raising rates this year.”
Economists’ estimates for GDP, or the value of all goods and services produced, ranged from 1.2 percent to 3.8 percent. The growth estimate is the first of three for the quarter, with the other releases scheduled for August and September when more information becomes available.
