The GDP grew at an annual rate of 2.8% in the second quarter, up from 1.4% earlier this year

The economy showed impressive growth in the second quarter of 2024, with GDP growing at an annual rate of 2.8%, up from 1.4% earlier this year, reaching $22.9 trillion, reports the Commerce Department.

GDP, aka gross domestic product, is a broad monetary measure of the goods and services produced in the country.

The GDP data hints at a “soft landing” for the economy, where inflation drops without triggering a recession—an outcome last seen in the 1990s.

President Joe Biden praised the growth on Thursday, highlighting his administration’s creation of 16 million new jobs, low unemployment, and wage gains.

The growth is driven by robust household spending and increased business investments. Consumer spending grew at an annual rate of 2.3%, surging in the second quarter as Americans bought more cars, recreational vehicles, and furniture. Business investments rose by 3.2%, and government spending played a key role.

Despite the strong performance, the housing sector has faced challenges: home construction fell by 6.3%, new home sales decreased by 7.4%, and existing home sales dropped by 5.4% in the past year. 

The unemployment rate increased to 4.1%, marking its third consecutive monthly increase. Manufacturing activity is slowing, with factory orders down by 2.2%.

That said, inflation, which had spiked in the first quarter of the year, eased during the second quarter.

The Federal Reserve plans to keep interest rates steady at its upcoming meeting but might cut them in September if inflation continues to cool.