US economic growth picks up to 2.3%

The figure – the first estimate of growth in the second quarter – followed an upwardly revised growth rate of 0.6% in the first three months of the year.

The Commerce Department said growth was boosted by increased consumer spending and cheaper fuel prices.

Analysts said the figure could make the US Federal Reserve more likely to raise interest rates in September.

“Updated GDP numbers deliver a double-punch to US economy doom-mongers, painting a reassuringly bright picture of the health of the US economy so far this year and raising the odds of the Fed hiking interest rates in September,” said Chris Williamson, chief economist at research firm Markit.

The 0.6% annualised growth rate for the first quarter of the year was an improvement on the previous estimate of a 0.2% contraction.

Consumer spending – a key driver of the US economy – grew at a rate of 2.9% in the second quarter, compared with 1.8% in the first three months of the year.

Recent figures have shown the US economy creating more than 200,000 jobs a month, and the unemployment rate has now dropped to 5.3%.

“The improving job market, alongside the boon to households from low inflation and falling oil prices, has been key to the economy’s ability to sustain strong growth,” Mr Williamson said.

 

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