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U.S. economic growth in Q2 tops Wall Street expectations

By Nicholas Sakelaris
U.S. economic growth in Q2 tops Wall Street expectations
Consumer spending was a primary driver in better-than-expected U.S. economic growth in the second quarter, the Commerce Department said Friday. File Photo by John Angelillo/UPI | License Photo

July 26 (UPI) -- U.S. economic growth during the second quarter was both good and bad, the Commerce Department said in its quarterly report Friday -- bad that expansion slowed to 2.1 percent, but good in that it performed better than analysts predicted.

The 2.1 percent growth was a decline from 3.1 percent in the first quarter, but most analysts on Wall Street projected expansion between 1.8 and 2 percent.

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The main drivers for the period between April and July, the report said, were consumer and government spending. Consumer spending rose 4.5 percent, its best performance since late 2017. A drop in private business investments, near 6 percent, stifled growth for its worst performance since 2015.

The report added that current-dollar GDP increased by 4.6 percent, or $239 billion, in the second quarter.

It remains to be seen how the report will affect the Federal Reserve when it meets next week for a policy meeting. Some experts have predicted the Fed will order a rate cut.

"The Fed is going to be cutting almost regardless because they boxed themselves into a corner," Joseph LaVorgna, chief economist for Americas at Natixis, told CNBC.

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Early reports for the third quarter have been mostly positive, including employment data and retail sales. More than 224,000 jobs were added in the month of June, beating expectations by about 60,000.

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