World economy - US-economic growth stronger than expected
The US Economy continued to show robust growth in the spring. The Gross Domestic Product (GDP) grew by 2.8 percent in the second quarter compared to the previous quarter, according to a preliminary estimate by the Trade Ministry in Washington. Economists had predicted a growth of 2.0 percent. The largest economy in the world had grown by 1.4 percent in the first quarter.
Private consumption remained a crucial support for the growth. "The largest economy in the world seems to be immune to global economic problems at the moment," writes Thomas Gitzel, Chief Economist of VP Bank. "While Europe is suffering from the weak development of global manufacturing industries, the US economy is countering this with its strong domestic consumption."
Financial markets are now looking at the US Federal Reserve (Fed), which holds its next meeting in the coming week. A rate cut is still expected for September. "The Fed can continue to hope that they have managed to achieve a soft landing for the US economy," write the economists at Commerzbank. "If inflation now turns towards the target of 2 percent, the Goldilocks scenario is perfect." This describes the state of a robust economic growth and low inflation.
US growth figures are annualized, meaning they are calculated on a yearly basis. They indicate how fast the economy would grow if the growth rate remained constant for a year. In Europe, this method is not used, so the figures are not directly comparable. To get a growth rate comparable to Europe, one would have to divide the US rate by four.
The robust growth of the US Economy in the spring has attracted attention from economists across Europe. This strong performance contradicts the struggles faced by many European economies, particularly due to the weak development of global manufacturing industries. The Federal Reserve System in Washington has been closely watched by financial markets, as they anticipate a potential rate cut in September. Despite these economic fluctuations globally, the Gross Domestic Product (GDP) of the United States of America continues to outperform expectations, with annualized growth of 2.8% in the second quarter.
