United States GDP grew by 3.1% year-on-year in the second quarter of 2024, the highest growth rate since the second quarter of 2022, and United States GDP grew by 2.8% annualized quarter-on-quarter in the second quarter, also at the third highest level since the third quarter of 2022. Clearly, the United States economy grew very strongly in the second quarter.
In terms of specific composition, consumption grew moderately by 2.3%, a moderate growth rate, accelerating from 1.5% in the first quarter.
Private sector investment rose sharply by 8.4 percent, further accelerating from 4.4 percent in the first quarter and the fastest pace in nearly a year. Faster growth in private-sector investment means strong job demand growth in the future, which could mean that labor demand will not be bad in the coming quarters and economic growth will be assured.
Government consumption and investment spending rose 3.1% in the second quarter, accelerating from 1.8% in the first quarter.
From the perspective of foreign trade, exports increased by 2% in the second quarter, which was relatively low, but imports increased by 6.9%, and export growth was significantly slower than import growth, which means that the trade deficit continued to widen, and foreign trade continued to constitute a negative factor dragging down United States economic growth.
In the first two quarters of 2024, imports continued to grow faster than exports, effectively reflecting the widening output gap in the United States economy, and domestic production becoming increasingly difficult to meet domestic demand, which is why the United States private sector is accelerating investment.
Overall, the current strong economic growth in United States, especially the faster growth in investment, will continue to provide impetus for subsequent United States economic growth, which actually indicates that the probability of a recession in United States coming quarters is low.
For the subsequent economic growth prospects of the United States, although investment spending will still be high, the decline in wage growth may mean that the United States savings rate will continue to decline and the growth rate of consumer spending will slow further, and the United States economic growth rate will likely continue to decline.
Since the United States economy still has a relatively clear output gap, this also means that demand in the United States labor market is likely to remain strong for a longer period of time (at least 1-2 years), and inflation will not quickly evolve into deflation.
All in all, the United States economy is likely to continue to slow in the coming quarters, but there will be no significant recession.