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US GDP rebounds to 2.6% in second quarter

July 28, 2017

US real gross domestic product grew at an annual rate of 2.6% in the second quarter, according to the “advance” estimate of GDP growth released today by the US Commerce Department.

In the first quarter, real GDP advanced 1.2%.

The economy was bolstered by a rebound in consumer spending, the largest source of US economic growth, MarketWatch reported. The improved GDP estimate suggests the early year slowdown largely reflected seasonal quirks such as poor weather and late tax refunds. The economy shows no signs of deterioration and is forecast to grow 2.7% in third quarter.

“Consumption accelerated in Q2 after a middling Q1 figure,” Brian Schaitkin, senior economist at The Conference Board, said in a statement. “Tight labor market conditions should keep disposable income rising steadily and could eventually accelerate wage and income growth. Increased consumer confidence also helped generate faster consumer spending.”

Schaitkin noted labor shortages in the construction industry may have temporarily arrested strong growth in residential investment. “Still, with demand growth solid, builders are eager to move ahead with new construction if they can find and pay for the workers to do it,” he said.

Growth in the staffing industry is strongly correlated with GDP growth, according to research from Staffing Industry Analysts.

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