U.S. gross domestic product rose 2.3 percent for quarter two and a quarter one revision of 0.6 percent erased a previously reported contraction. Spurred by strong consumer spending on big ticket items like cars and home construction, U.S. GDP was able to move past constraints such as harsh weather, slowing global markets, port delays, and poor wage gains that hindered growth in early 2015. However a struggling energy sector was the main drag on U.S. growth, as oil rigs cope with low crude prices. Along with the overall GDP number, a collection of U.S. economic data was released today.
Consumer spending, the driver of U.S. growth, increased 2.9 percent, home construction jumped 6.6 percent and PCE, an indicator for inflation, rebounded at 2.2 percent. Furthermore, imports increased 3.5 percent while exports jumped 5.3 percent, business investment fell 0.6 percent, and the U.S. savings rate fell from 5.2 percent to 4.8 percent. This positive data released today goes hand in hand with the Fed's ideal market conditions for a rate hike; growth is moderate, inflation is nearing 2 percent, and strong labor market boosts consumer spending, says Voya Global.
