Real GDP grew at a 2.2% annual rate from April through June, the Bureau of Economic Analysis said Wednesday, up from the 1.5% it reported in both earlier estimates.
By the numbers: The 0.7-point upgrade came mostly from investment, consumer spending and government spending, and first-quarter growth was revised to 2.5%. Consumer spending, investment and exports led the quarter, while imports, which subtract from GDP, also rose.
- Real final sales to private domestic purchasers, a cleaner read on underlying demand, rose 4.6%. Corporate profits from current production increased $384 billion in the quarter.
Yes, but: Prices stayed hot. The PCE price index rose 5.0% in the quarter, and the core index excluding food and energy rose 3.3%, both revised down slightly from the prior estimate.
- Markets read the strength as a reason for rates to stay high: the S&P 500 slipped 0.3% Wednesday, the Dow fell 443 points, and the 10-year Treasury yield climbed to 5.29%, a level last seen in 2002, per AP.
Why it matters: A stronger economy is good news for jobs, but it also keeps the Federal Reserve from easing and keeps mortgage and car-loan rates elevated. If you are deciding whether to lock a rate or wait, the data says waiting for relief is a bet against the current trend.
