U.S. Economy Surges with 2.8% Growth in Q2 2024 Amid Rising Interest Rates

The U.S. economy grew at an annualized rate of 2.8% in the second quarter of 2024, surpassing many economists’ expectations. This stark increase comes after a slower growth rate of 1.4% in the previous quarter, according to the Bureau of Economic Analysis. The results highlight the U.S. economy’s robustness, especially in the face of increasing interest rates that have impacted borrowing and spending.

In conjunction with the GDP growth, the Labor Department reported a decline in weekly jobless claims. For the week ending July 20, initial unemployment claims dropped from 245,000 to 235,000, falling below the anticipated figure of 238,000. This indicates continued strength in the job market, as the four-week average of weekly jobless claims showed little significant change. Continuing claims also decreased slightly from 1.86 million to 1.851 million, further suggesting stability in employment.

In response to these economic indicators, the U.S. dollar index saw a minor increase of 0.1% shortly after the data was released. Before these reports emerged, the market had widely expected an interest rate cut by the Federal Reserve in September. Following the GDP news, futures on major U.S. indices stabilized, with Nasdaq 100 contracts remaining flat and S&P 500 contracts experiencing a slight uptick. This follows a rough day for tech stocks, as the Nasdaq tracked by the Invesco QQQ Trust faced its biggest decline since October 2022.