Finally,
some good news this week. the U.S. economy was in even better shape than we
thought between April and June.
The U.S. economy
grew 3.7% in the second quarter, a very big upward revision than the first official estimate, 2.3%, according
to the Commerce Department's measure of gross domestic product, the broadest
measure of economic activity. Economists projected the new number to be 3.2%.
Thursday's upward revision is welcome news
as China's slowing economy is sparking volatility in stock markets, plunging
currencies in emerging markets and
potentially delaying a rate hike from the U.S. Federal Reserve.
Construction and
business spending rose in the three months, helping drive the overall GDP
number up.
The good economic data only increases the
speculation about when the Fed will raise its key interest rate. For much of
the summer, economists believed the Fed would do a rate hike in September. But
with China's devaluation of the Yuan, and the recent turmoil in U.S. stock
markets, the consensus is gradually shifting to December for a rate hike.
New York Fed
President William Dudley says a September rate hike is "less compelling," now, but he didn't completely rule it
out either.
Even Dudley
mentioned on Wednesday that he anticipated GDP going higher, and he said the
U.S. economy is still doing well.
Rate hike
rumblings aside, the revised GDP figure shows that the U.S. economy is still
having a solid year despite all the headwinds abroad.
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