The 2nd quarter economic report features insight on U.S. GDP, employment, monetary policy & global outlook.
GDP Growth: Q2 2024
- U.S. GDP grew at a 2.8% annual rate in Q2, up from 1.4% in Q1.
- Growth driven by increased consumer spending, business investment, and inventory growth.
- Consumer spending rose by about 2%, especially in health care, housing, recreation, and durable goods.
- Business investment increased, particularly in equipment and intellectual property.
- Inventory growth was notable in wholesale and retail trade, offset by declines in mining, utilities, and construction.
- Gross domestic purchases prices increased by 2.3%, down from 3.1% in Q1.
- Excluding food and energy, prices increased by 2.5%, down from 3.3% in Q1.
- Personal consumption expenditures price index increased by 2.6%, compared to 3.4% in Q1.
- Current-dollar personal income increased by $237.6 billion, down from $396.8 billion in Q1.
- Real disposable personal income growth slowed, and the personal saving rate decreased to 3.5%.
Employment: Q2 2024
- 206,000 jobs added in June, with a slight rise in the unemployment rate to 4.1%.
- Labor force participation rate increased to 62.6%, driven by prime-age workers.
- Wage growth slowed, with average hourly earnings rising 0.3% from May and 3.9% year-over-year.
- Job growth mainly in government and healthcare sectors.
- Private sector payrolls slowed, with gains in construction offset by declines in manufacturing.
- Job openings rose to 8.14 million in May, but a cooling trend is expected.
Monetary Policy: Q2 2024
- Federal Reserve left the overnight federal funds rate unchanged.
- Potential for at least one interest rate cut in 2024 remains.
- Disinflation resumed, with CPI inflation falling to 3.3% in May.
- FOMC held rates steady, awaiting further evidence of returning inflation to the 2% target.
- Financial markets expect a 0.25% rate reduction in September.
- Labor market showed better balance between supply and demand, with nominal wage increases trending down.
Global Economy: Q2 2024
- IMF forecasted global growth at 3.2% for 2024 and 3.3% for 2025.
- U.S. growth revised to 2.6% for 2024, slowing to 1.9% in 2025.
- Euro area expected to see modest growth driven by services and net exports.
- Japan's growth outlook revised downward due to supply disruptions and weak investment.
- Stronger activity in emerging markets, especially China (5% growth forecast for 2024) and India (7%).
- Latin America faced downward revisions for Brazil and Mexico due to natural disasters and moderating demand.
- Middle East and Central Asia impacted by oil production cuts and regional conflicts, with notable downward revisions for Saudi Arabia and Sudan.
