U.S. Jobless Claims Fall to 218K, Q2 GDP Holds at 3% on Strong Consumer Spending

GDP Growth Revised to 3.0% for Q2 2024

The U.S. economy expanded at an annual rate of 3.0% in the second quarter of 2024, as per the latest estimates from the Bureau of Economic Analysis (BEA). This growth rate is consistent with prior estimates, reflecting a solid recovery from the first quarter’s 1.6% growth. The increase was driven by higher consumer spending, private inventory investments, and nonresidential fixed investments.

Key contributors to the revision include an upward adjustment in private inventory investment and federal government spending, while nonresidential fixed investment and exports were revised downward. Imports, which detract from GDP, were revised upward but did not significantly affect the overall economic growth figure.

Consumer spending was particularly strong, and its acceleration from Q1 was a critical factor in the overall GDP rise. Conversely, residential fixed investment showed signs of weakness, partially offsetting the positive economic trends.

Corporate Profits See Upward Revisions

Corporate profits also saw substantial upward revisions in Q2 2024, with an increase of $132.5 billion. Domestic nonfinancial corporations led the charge with a $108.8 billion gain, while domestic financial corporations saw a modest $42.5 billion increase. However, profits from the rest of the world decreased by $18.8 billion.

Real Gross Domestic Income (GDI) was revised up to 3.4%, marking a significant upward adjustment of 2.1 percentage points. This led to a supplemental measure of U.S. economic activity, the average of real GDP and GDI, rising 3.2%.

Durable Goods Orders Remain Flat

The latest data on durable goods orders for August showed little change, increasing by just $0.1 billion to $289.7 billion. This follows a strong 9.9% increase in July. Excluding transportation, orders rose 0.5%, driven by electrical equipment and appliances, which increased by 1.9%. However, excluding defense orders, the data shows a slight 0.2% decline.