Spending by consumers and businesses drove second quarter growth. Fred Katayama reports.
The U.S. economy bounced back briskly in the second quarter. Gross domestic product rose at a 2.6 percent annual rate - more than double the previous quarter's 1.2 percent pace. Driving the bulk of the second quarter growth: consumer spending. But there are concerns that spending could slow in the current quarter because wage growth remains sluggish. Also helping expand the economy: businesses spent more on equipment, and exports outgrew imports. There was one drag on growth: housing. Investment in home building fell sharply. The Commerce Department's report also showed little inflation and a deceleration in wage growth. TS Lombard chief U.S. economist Steven Blitz said, "This GDP number keeps the Fed right on target to announce in September the start of unwinding its balance sheet and in December, another 25 basis point rate hike." After the report, Wall Street fell. So did the dollar and government bond yields.