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2nd LD Writethru: U.S. economy expands at 2.3 pct rate in Q2

Xinhua, July 30, 2015 Adjust font size:

The U.S. economy expanded at an annual rate of 2.3 percent in the second quarter, a moderate bounce from the revised 0.6 percent increase in the first quarter, the Commerce Department said Thursday.

The growth in the second quarter was lower than the market expectation of over 2.5 percent.

The Commerce Department said the acceleration in gross domestic product (GDP) growth in the quarter reflected an upturn in exports, stronger consumer spending and stronger state and local government spending. Weaker business investment and federal government spending have restricted the growth in the second quarter.

It also said that the economy grew at a 0.6 percent rate in the first quarter, an upward revision from a previously reported 0.2 percent contraction.

Thursday's GDP report was consistent with the U.S. Federal Reserve's assessment of the economy. The Fed said on Wednesday that economic activity has been expanding moderately in recent months despite a soft business investment and net exports.

In the second quarter, consumer spending, which accounts for about 70 percent of the U.S. economy, rose 2.9 percent, compared to an increase of 1.8 percent in the first; exports of goods and services increased 5.3 percent in the second quarter, in contrast to a decrease of 6 percent in the first, while imports increased 3.5 percent, lower than the first quarter's 7.1 percent surge; and non-residential fixed investment decreased 0.6 percent in the second quarter, in contrast to an increase of 1.6 percent in the first.

Fed officials on Wednesday upgraded their assessment of the job market and housing market, a sign that the central bank remains on track to raise interest rates later this year. But it did not provide a clear signal for the rate hike timetable.

Fed chairwoman Janet Yellen has said that officials expected to raise interest rates later this year. Market investors widely see September or even later as the most likely time for a Fed rate increase. The Fed has kept its benchmark short-term interest rate near zero since December 2008. Endi