Thu Sep 26 12:51:41 UTC 2024: ## US Economy Rebounded Stronger Than Thought, Fueled by Consumer Spending: Revised Data
**Washington, D.C.** – The U.S. economy’s recovery from the pandemic was stronger than previously estimated, according to revised government data released by the Bureau of Economic Analysis (BEA). The data show a larger-than-expected boost in consumer spending, driven by robust incomes, played a key role in the rebound.
The BEA’s comprehensive annual update revealed a 5.5% average inflation-adjusted increase in gross domestic product (GDP) from the second quarter of 2020 through 2023, surpassing the previously published figure of 5.1%. The revised data indicates the economy grew $294.2 billion more during this period than initially reported, with two-thirds of that revision attributed to stronger consumer spending.
The second quarter of 2024 saw a 3% increase in GDP, driven by growth in consumer spending, inventory investment, and business outlays. The first quarter of the year also saw an upwardly revised GDP growth of 1.6%.
Furthermore, the BEA revised gross domestic income (GDI) sharply higher for the first half of 2024. This revision indicates that Americans saved more than previously estimated, which could potentially buffer against future economic slowdown.
Growth in 2022 was also revised upward to 2.9% from 2.5%, with the revision concentrated in the first half of the year. However, GDP growth in the third and fourth quarters of 2023 was revised down slightly, indicating a modest softening of momentum entering 2024.
The updated data also show that the U.S. economy did not experience consecutive quarters of declining GDP in 2022, as initially reported. The revisions indicate that only the first quarter of 2022 saw a decline in GDP, not the second quarter as previously thought.
The BEA’s annual update also revealed a significant increase in corporate profits during the five years ending in 2023, which may help explain the strong consumer spending observed during this period.
Overall, the revised data paints a more positive picture of the U.S. economy’s recovery from the pandemic. The robust consumer spending and strong income growth suggest a more resilient economy than previously thought. However, the modest softening of growth in the second half of 2023 and the continued potential for economic volatility remain important factors to monitor going forward.
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