Second quarter GDP forecast points to 1.8% growth despite sturdy spending
MarketWatch reports U.S. GDP is expected to rise at a 1.8% annual rate, even as consumers and businesses kept spending.
By Sal Moretti · Money Reporter
2 min read
The second quarter GDP forecast is set to show the U.S. economy expanding at a 1.8% annual rate for April through June, according to MarketWatch, a number that may look quieter than the activity underneath it.
MarketWatch’s Jeffry Bartash reported that consumers and businesses spent freely during the quarter, giving the economy support even as the Iran war pushed inflation higher. The government’s gross domestic product report is scheduled for release Thursday morning.
GDP is the broad official measure of economic output. It tracks the value of goods and services produced and is widely used as the main scoreboard for whether the economy is speeding up, slowing down or shrinking.
What is the second quarter GDP forecast?
The current forecast cited by MarketWatch is for GDP to rise at a 1.8% annual pace in the second quarter. That covers the three months from April through June.
An annual pace does not mean the economy grew 1.8% in three months. It expresses the quarter’s growth rate as if that pace continued for a full year, which is the standard way U.S. GDP figures are reported.
MarketWatch reported that the headline figure may not fully reflect the strength in the economy because consumer and business spending remained firm. Those two engines matter because household purchases and company outlays are central parts of overall economic activity.
The report also pointed to two major events hanging over the quarter: the World Cup, which MarketWatch said gave the economy a boost, and the Iran war, which it said caused little damage to growth while adding pressure to inflation.
Why the GDP number may need a closer look
A 1.8% reading would sound steady rather than flashy. MarketWatch’s point is that the surface number could hide stronger private demand, especially if spending by households and companies did more of the work than the overall GDP rate suggests.
The inflation angle also matters. MarketWatch reported that the Iran war lifted inflation during the quarter, which can complicate the read on growth because higher prices can make economic strength harder to judge from a single top-line number.
Thursday’s release will give investors, policymakers and households a fuller look at how the economy performed in the spring. For now, the takeaway from MarketWatch is straightforward: the official growth rate may land at 1.8%, but the details on spending could tell a livelier story.
This story draws on original reporting from MarketWatch.