US economic growth increased to a 2.8% annual rate

US economic growth increased to a 2.8% annual rate
The US economy surged last quarter, achieving a robust 2.8% annual growth rate, fueled by strong consumer and business activity despite the ongoing challenge of high interest rates. According to a report from the Commerce Department released recently, the gross domestic product—representing the total output of goods and services—accelerated in the April-June period, following a more modest 1.4% growth in the January-March quarter. Economists had predicted a weaker growth rate of 1.9%. The GDP report also highlighted a continued easing of inflation, although it remains above the Federal Reserve's 2% target. The central bank's preferred inflation measure rose at a 2.6% annual rate last quarter, down from 3.4% in the first quarter. Excluding the more volatile food and energy sectors, core PCE inflation increased at a 2.9% rate, a decline from 3.7% in the previous quarter. These latest figures bolster confidence that the U.S. economy may be nearing a rare "soft landing," where elevated interest rates set by the Fed curb inflation without pushing the economy into recession. Key to last quarter's growth was consumer spending, which is vital for the U.S. economy. It rose at a 2.3% annual rate in the April-June period, an increase from 1.5% in the first quarter. Spending on goods, including cars and appliances, jumped at a 2.5% rate after experiencing a decline of 2.3% earlier in the year. Business investment also contributed positively last quarter, with equipment investment soaring by 11.6% annually. Growth was further supported as businesses increased their inventories. However, a notable rise in imports, which are deducted from GDP calculations, reduced overall growth by approximately 0.9 percentage points during the April-June period.