US Roars Back With 4% GDP Increase in Q2

The US economy grew at an annual rate of 4% during the April-to-June period, latest figures released by the US Department of Commerce have shown.

Consumer spending – which makes up over two-thirds of US economy activity – grew by a robust 2.5%.

Business spending increased by 14% in the world’s largest economy, as businesses restocked inventories.

The growth during the second quarter reverses the contraction seen earlier in the year.

Measured on a quarter-on-quarter basis, GDP grew by 1%.

In the previous quarter, from January to March, the US economy shrank a revised 2.1% on an annualised basis, as a result of harsh winter weather.

However, even with the rebound, the winter is likely to mean overall growth this year will be only 1.6% – less than in 2013.

That could cause the Federal Reserve – which ends a two-day meeting on Wednesday – to continue to keep interest rates low for an extended period into 2015.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza