U.S. Economy Grew 2.8% in Q2 2024, Exceeding Expectations

Based on data from the Federal Reserve processed by the *Financial Times* (FT), the United States (US) economic growth was recorded at 2.8% year-on-year (yoy) in the second quarter of 2024.

This achievement is double the growth of 1.4% (yoy) in the first quarter of 2024.

The FT states that the second quarter of 2024's achievement exceeded economists' expectations of 2%. This growth is also seen as a sign of continued consumer resilience as the Fed considers cutting interest rates in the coming months.

The Fed had previously raised interest rates to their highest level in 23 years, at 5.25%-5.5%, in response to inflationary shocks caused by the pandemic.

The central bank is said to have successfully brought price pressure down to the 2% target without triggering a recession. According to the June 2023 consumer price index report written by the *FT*, US inflation is now around 3%.

Veronica Clark, an economist at Citigroup, said that there is still strong momentum behind the Fed since the first quarter. This is because there is still a slowdown in certain sectors.

"If you look at other monthly data, the trend still shows that consumption is slowing and there are worrying signs in the labor market data," said Veronica.

James Knightley, chief international economist at ING, still appreciates this growth as it represents a fairly good recovery after the weakening in the first quarter. "However, economic challenges are increasing," added James.

Both Clark and Knightley told the *FT* that they expect the Fed to cut interest rates in September 2024.