After a winter of dismal growth, the U.S. economy has rebounded strongly with a 4% rise in GDP in the second quarter of 2014.
The rise in GDP was largely fueled by personal consumer spending – which rose by 2.5% last quarter – business inventory investment and construction.
The strong quarter of growth came as a relief after a gloomy first quarter, when the GDP shrank by 2.1%, according to a revised estimate from the Commerce Department, which previously reported a decline of 2.9%. But analysts believe that the harsh weather contributed to at least some of the depressed spending and investment and that pent-up demand fueled the strong numbers in the second quarter.
President Obama highlighted the numbers Wednesday during a speech in Kansas City, Missouri.
“The unemployment rate is at its lowest point since September of 2008. It’s dropped faster than any time in 30 years. This morning, we found out that in the second quarter of this year our economy grew at a strong pace, and businesses are investing, workers are building new homes, consumers are spending, America is exporting goods around the world,” the president said, according to a White House transcript.
Obama said the “resilience and resolve of the American people” has helped the economy rebound from the financial crisis of 2008.
“So sometimes you wouldn’t know it if you were watching the news, but there are a lot of good reasons to be optimistic about America,” Obama continued. “We hold the best cards. Things are getting better. The decisions we make now can make things even better than that.”
Economists don’t expect the economy to continue growth at the same rate for the rest of the year, though some believe the picture has brightened somewhat. “This release provides evidence that the economy is healthy and will continue to grow at an above-average rate in the second half of this year and into 2015,” saidDoug Handler, chief U.S. economist for IHS Global Insight.
“The story is the same—subpar growth during the first few years of the recovery. But 2014 is looking much better,” Stuart Hoffman and Gus Faucher of PNC Financial Services Group said in a statement. “After the very good second quarter growth should settle in at an above-trend 3.0% annual rate in the second half of this year.”
The Economic Policy Institute was more pessimistic. “Essentially, we made up some of the ground lost in the first three months of this year, but there’s nothing in today’s data to indicate that the economy is growing more strongly than it has for the past couple of years,” the group said in a statement.