- The Washington Times - Friday, September 26, 2014

The U.S. economy grew at a robust 4.6 percent annual rate in the second quarter in the best performance since 2011, the Commerce Department reported Friday.

The brisk growth rate, which was revised up from 4.2 percent reported last month, was powered by across-the-board strength in nearly ever corner of the economy from exports and business investment to housing and state and local government spending.

The economy this spring also was enjoying a major rebound from an unusually depressed first quarter in which harsh winter weather caused a 2.1 percent drop in output. The momentum in the economy has continued through the summer, and economists expect another healthy showing in the third quarter.

“The impressive gain in the second quarter looks to be far more than just a weather-related upturn, with evidence pointing to an underlying buoyant pace of economic expansion,” said Chris Williamson, chief economist at Markit.

“Strong growth has persisted throughout the third quarter,” with Markit’s own measure of U.S. economic output showing the summer might well have been “the best quarter of business activity growth seen since the financial crisis” of 2008, he said.

Wall Street, which saw its biggest sell-off since July on Thursday, rallied on the news, with the Dow Jones industrial index finishing the day up 167 points,  early 1 percent, to 17,113.15, and both the broader S&P 500 and the Nasdaq indexes also both in positive territory.

“The rebound points to solid momentum entering the third quarter,” said Michael Gapen, economist at Barclays. But he expects growth to moderate from the torrid spring pace in the second half of the year.

Mr. Gapen said he was surprised that consumer spending on health care didn’t contribute more to the spring surge in growth, as figures from the Census Bureau recently confirmed there was a strong spurt in health care spending as people rushed to comply with President Obama’s health care mandate during the quarter.

But with consumers having to keep tight budgets in light of weak wage growth, they offset their increase in spending on health care premiums by spending less on recreation and other services, the department found.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide