The US economy rebounded in the second quarter from a first quarter contraction, reflecting a decrease in imports following pre-tariff ramp-ups and increased consumer spending.
Gross domestic product (GDP) expanded at an annual 3pc pace following a contraction of 0.5pc in the first quarter, the Bureau of Economic Analysis said Wednesday in the first of three estimates. Economists surveyed by Trading Economics had forecast 2.4pc GDP growth for the second quarter.
Imports contracted by an annual 30.3pc in the second quarter following 37.9pc growth in the first quarter as businesses stocked up on inventory to get ahead of President Donald Trump's threatened tariffs. The import growth, which subtracts from growth, in the first quarter was the main culprit for the first quarter GDP contraction. Exports fell by 1.8pc in the second quarter, led by a 5pc decline in goods exports.
Consumer spending rose by an annual 1.4pc in the second quarter following 0.5pc growth in the first quarter. Domestic investment, which includes inventory builds, fell by 15.6pc in the quarter following 23.8pc growth in the first quarter. Spending on structures fell by 10.3pc in the latest quarter, with residential spending down by 4.6pc.
Government spending rose by 0.4pc after falling by 0.6pc in the first quarter.
Defense spending rose by an annual 2.2pc following a decline of 7.1pc in the prior quarter.
By Bob Willis
