U.S. economic growth unexpectedly accelerated in the second quarter of 2023, the Commerce Department revealed in a preliminary report released on Thursday.
The report said real gross domestic product surged by 2.4 percent in the second quarter after jumping by 2.0 percent in the first quarter. Economists had expected the pace of GDP growth to slow to 1.8 percent.
“Quirky seasonal adjustment factors may lead to outsized revisions down the road, but these data suggest the economy was solid in Q2,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “The economy withstood pervasive pressures from persistent recession fears, elevated interest rates, the Fed’s hawkish policy tilt, and tighter bank lending standards.”
The Commerce Department said the unexpected acceleration in GDP growth primarily reflected an upturn in private inventory investment and an acceleration in nonresidential fixed investment.
The positive contributions were partly offset by a downturn in exports and decelerations in consumer spending, federal government spending, and state and local government spending.
The GDP growth during the quarter reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, private inventory investment, and federal government spending that were partly offset by decreases in exports and residential fixed investment.
Meanwhile, the Commerce Department said the personal consumption expenditures price index jumped by 2.6 percent in the second quarter after surging by 4.1 percent in the first quarter.
Excluding food and energy prices, the PCE price index shot up by 3.8 percent in the second quarter following a 4.9 percent spike in the first quarter.
Economists had expected consumer prices to surge by 3.0 percent, while core consumer prices were expected to leap by 4.0 percent.