The US economy grew above estimates in the second quarter of the year. GDP grew by 2.4% versus +2% in the previous quarter and significantly higher than the 1.8% expected by analysts.. The figure also weighs on Wall Street, which opened higher. As such, America’s economic growth remained robust in the second quarter, proving reactive despite the Fed’s rate hikes and far from the recession many had predicted.
Expansion of sectors
“Real GDP growth reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, private investment in inventories, and federal government spending, which were partially offset by declines in exports and residential fixed investment. Imports, which are a deduction in the calculation of GDP, fell,” the American Bureau of Economic Analysis reports.
GDP and the Taylor Swift effect
Consumer spending drove GDP in the quarter, rising 1.6%, led by holidays, restaurants and concert tickets. In particular, the Taylor Swift factor is very important. The 137th concert tour across 5 continents is actually the driving force behind US GDP. “Taylor Swift’s entire U.S. tour could generate total spending of $4.6 billion, more than the GDP of 35 countries,” said think tank Common Sense Institute. Just think about hotels, restaurants and domestic flights.
Returning to GDP, the US jump shows a slowdown from +4.2% in the previous three months. Federal spending then fell to +0.9% from +6% in the first quarter, and state and local government spending was +3.6% from the previous +4.4%.