Revised data on the US economy for the second quarter exceeded expectations

The US authorities have improved their assessment of the country's economic growth in the second quarter, with the new result being better than what analysts had expected. The reason for positivity was the data on investment and consumer spending, as well as imports. Also this week, the US Fed's preferred inflation indicator, the Personal Consumption Expenditures Index, will be published.

The U.S. economy grew by 3.3% in the second quarter, the U.S. Bureau of Economic Analysis (BEA) reported. This is revised data: preliminary data, which were released on July 30, showed GDP growth of 3%. By comparison, U.S. GDP contracted by 0.5% in the first quarter, the first decline since 2022.

The revised result was better than the consensus expectations of analysts, who had forecast a 3.1% change in the estimate from 3%.

The upward revision in the U.S. GDP estimate was mainly due to improved statistics on business investment and consumer spending, as well as imports, which were only partially overshadowed by a deterioration in government spending data, the BEA said.

Also on Thursday, the U.S. Labor Department said jobless claims for the week that ended Aug. 23 came in at 229,000 - down 5,000 from a week earlier. Economists polled by The Wall Street Journal had expected 230,000.

The dollar continued to decline and the yield on two-year U.S. Treasury bonds rose slightly after the release of GDP data, Bloomberg noted.

Even before the Bureau's report was released, Continuum Economics senior North America economist Dave Sloan speculated that the GDP revision would be tied to retail sales, especially demand for short-term goods (which require regular updating - food, clothing, energy.) The GDP report will show personal consumption rebounding at a moderate pace after a weak start to the year, Bloomberg wrote.

Sloan also expected an upward revision to construction sector statistics: positive trends in private nonresidential and public construction should outweigh declines in residential real estate, the economist said.

The PCE index, a measure of personal consumption expenditures, is expected to be released on Friday, August 29. The core index, which excludes volatile food and energy prices, is the U.S. Federal Reserve's preferred measure of inflation.

PCE is expected to show an increase in prices, Bloomberg noted. The inflation rate affects the Fed's monetary policy decisions. Traders now estimate the probability of a rate cut at the Fed's September meeting at 85.3%, the FedWatch tool shows.

This article was AI-translated and verified by a human editor