GDP Review: Q2-24

In the second quarter of 2024, the U.S. economy saw solid growth, with total GDP increasing by 4.2% in current dollar terms, bringing the overall value of goods and services produced to $7.29 trillion. After adjusting for inflation, real GDP showed a more moderate rise of 0.7%, suggesting that price increases continue to impact the economy. Consumer spending remained a key driver, growing 4.3% overall, with significant increases in spending on services like healthcare and education. On the investment front, business investments grew by 4.9%, but the housing market struggled, with inflation causing a slight decline in real residential investment (-0.7%).

Government spending also contributed to economic growth, particularly at the state and local levels, with government expenditures rising by 5.8% in dollar terms and 0.7% after inflation adjustments. However, the economy faced a challenge with net exports—the difference between what the U.S. sells abroad and what it buys from other countries—worsening significantly. Imports grew faster than exports, leading to a larger trade deficit, which negatively impacted overall growth.

In summary, while strong consumer spending and business investments are helping to drive the economy forward, inflation and a growing trade deficit present ongoing challenges that could affect future growth.