The real gross domestic product (GDP) of the United States expanded at an annual rate of 2.1 per cent in the second quarter, the US Bureau of Economic Analysis' (BEA) final estimate showed on Thursday, September 28. The reading came in line with the previous estimate and expectations by economists on the Street.
"The update primarily reflected a downward revision to consumer spending that was partly offset by upward revisions to nonresidential fixed investment, exports, and inventory investment," the BEA said.
The government agency that constructs the gross domestic product report, said there was no evidence that residual seasonality, which plagued the GDP data several years ago, was an issue, according to news agency Reuters.
The government adjusts economic data to remove fluctuations such as seasonal weather patterns and holidays that normally occur at roughly the same time and magnitude every year, to make the series easier to interpret and analyze.
However, seasonal effects have lingered in some cases even after the data was seasonally adjusted. This was most prevalent in first-quarter GDP data, before the government resolved the problem in 2018. Back then, the residual seasonality tended to understate economic growth in the first quarter.
Inflation was a little hotter than previously reported in 2022, when the US Federal Reserve started raising interest rates. The personal consumption expenditures price index excluding food and energy increased 5.2 per cent last year, revised up from 5 per cent, according to official data.
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Meanwhile, the US initial jobless claims for the week ended September 23, came in at 2.04 lakh compared to 2.02 lakh in the previous week.
Policymakers at the US central bank see the US GDP growing 2.1 per cent this year, a notable upgrade from the 1 per cent growth projected in June, and expanding by 1.5 per cent next year. Meanwhile the unemployment rate - which is currently at 3.8 per cent - is seen peaking at 4.1 per cent in 2024 - and remaining there for 2025 - versus the 4.5 per cent high-water mark seen in June.
On September 21, the US Federal Reserve unanimously voted to keep interest rates at a 22-year high-mark ---between 5.25 per cent to 5.5- per cent, while forecasting an additional rate hike before the end of the year to bring down inflation.
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