US economy second quarter growth: GDP grows 2.2 percent as consumer spending and business investment rise

The Commerce Department said the US economy grew 2.2 percent in the April-June period. It was faster than the 1.5 percent estimated in July, but slower than the 2.5 percent growth rate in the January-March period.

According to the Commerce Department:

• GDP grew 2.2 percent in the second quarter (year over year).
• GDP grew 2.5 percent in the first quarter of 2024.
• GDP growth was initially estimated at 1.5 percent for the second quarter.
• Spending by consumers jumped 3.8 percent, compared to 0.7 percent in the first quarter.
• Investment by businesses, less housing, surged 9 percent.
• A gauge of core economic growth also increased 4.6 percent, compared to 1.8 percent in the first quarter.
• Investment in housing rose 2.8 percent.

Consumer spending makes up 70 percent of the economy. The increase was fueled by the rise in the stock market and the boom in artificial intelligence (AI).

Investment and consumer spending

Spending on business investment, less housing, jumped 9 percent in the second quarter. Companies are investing heavily in artificial intelligence. According to Michael Pearce, chief US economist at Oxford Economics:

The economy is now generating powerful positive feedback loops on AI-driven productivity gains and the wealth effect on higher-income households. The Commerce Department’s report is the third estimate of second-quarter GDP growth. The first estimate of third-quarter GDP growth will be released on October 29.