Consumer spending gains in the second quarter helped the U.S. economy expand more than forecasted and may help the U.S. withstand a global slowdown, according to Commerce Department figures released Friday.
That report falls in line with the latest economic snapshot released this week by the Federal Reserve Bank of New York, which indicates consumer spending is on a steady growth trajectory after rebounding from a sluggish first quarter.
Real consumption expenditures grew at a strong pace in July after being largely flat in June, according to the Fed’s September. The Fed established U.S. Economy in a Snapshot in June and said it will draw from various economic and financial indicators to provide an overview of current economic and financial developments.
The snapshot highlights trends in consumer confidence and spending, GDP growth and more. The Fed reports there are signs of improvement in housing market conditions as single-family housing starts in July and existing home sales touched post-recession highs.
The Commerce Department on Friday also credited gains in construction for helping the economy expand in the second quarter.
Strong hiring, cheaper gasoline and higher home prices probably will sustain household purchases, which account for about 70% of the economy. That helps bolster Federal Reserve Chair Janet Yellen’s view that the U.S. will overcome any fallout from cooling overseas markets and swings in global financial and commodity markets.
Gross domestic product rose at a 3.9% annualized rate, compared with an earlier estimate of 3.7%, according to Commerce Department figures. The median forecast of 76 economists surveyed by Bloomberg called for a 3.7% gain.