U.S. Economy Shows Resilience Amid Potential Rate Cuts

The U.S. economy is expected to have grown in the second quarter driven by consumer spending and inventory accumulation. Despite this growth, inflation has slowed, supporting the Federal Reserve's anticipated interest rate cuts in September. Resilient labor markets and consumer spending continue to propel the economy forward.

The U.S. economy likely saw growth in the second quarter, driven by robust consumer spending and inventory accumulation, though the anticipated expansion aligns with expectations for a September interest rate cut by the Federal Reserve.

The Commerce Department's upcoming report on second-quarter GDP is forecast to reveal a significant slowdown in inflation, providing a positive backdrop for the Fed's policy meeting next week. Even with the considerable Fed rate hikes in recent years, the economy continues to outperform global peers, supported by a resilient labor market.

According to Brian Bethune, an economics professor at Boston College, the economic expansion reflects a 'Goldilocks outlook,' characterized by gradual growth and reduced inflation. Consumer spending is estimated to have increased by 2.0% and businesses have expanded their inventories, both of which contribute to GDP growth. Economists, however, anticipate slower growth in the second half of the year due to factors such as a cooling labor market and potential political uncertainties.

(With inputs from agencies.)