The initial data for second quarter GDP shows 1.5% annualized growth and that is the number on which most people will focus. It came in below expectations and marked a slowdown from the first quarter’s 2.1% pace. Behind the headline, though, real final sales to private domestic purchasers accelerated to 3.9%, the fastest pace in more than three years. That measure strips out trade, inventories and government spending to capture genuine private consumer and business demand. For the quarter, consumer spending rose 3.2% and business investment grew 8.4%. What held the top line number down was a surge in imports and an inventory drawdown, but the consumer was stronger than the headline number would indicate.
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