The U.S. economy grew at a 3 percent annualized pace in the second quarter, a faster pace than Wall Street expected.
The Bureau of Economic Analysis’s third estimate of U.S. gross domestic product (GDP) for the second quarter was unchanged from the second estimate, which indicated annualized growth of 3 percent. Economists had estimated annualized growth of 2.9 percent. The third estimate of second-quarter GDP confirms that economic growth was higher than the 1.4 percent annualized growth seen in the first quarter.
“These revisions only reinforce our belief that the U.S. economy will continue to grow at a decent pace over the coming year, suggesting that labor market conditions are unlikely to deteriorate materially from here,” Michael Pearce, deputy chief economist at Oxford Economics, wrote in a note to clients Thursday.
Separately, data from the U.S. Labor Department released Thursday showed 218,000 jobless claims were filed in the week ending Sept. 21, below Wall Street’s expectations for 223,000. That’s the lowest level of weekly claims since mid-May.
The data release comes a week after the Federal Reserve cut interest rates by half a percentage point in an effort to preserve what Fed Chairman Powell described as an economy in “good shape.”
“The economy is growing at a solid pace. Inflation is down,” Powell said on September 18 after the rate cut decision. “The labor market is healthy. We want to keep it there. That’s what we’re doing (by cutting interest rates).”
Learn more: What the Fed’s Rate Cut Means for Bank Accounts, CDs, Loans, and Credit Cards
The GDP figures released Thursday are considered backward-looking because they update economic growth for a quarter that ended in June. But projections show the economy grew at a solid pace in the third quarter, which ends in September.
The Atlanta Fed’s GDPNow index predicts that the U.S. economy will grow at a 2.9% annualized rate. Goldman Sachs’ economics team predicts third-quarter growth of 3% annualized.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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