The Commerce Department reported that the U.S. economy expanded at an annualized rate of 4.2 percent in the second quarter, slightly higher than the 4.0 percent estimate provided a month ago. This follows a first quarter weather-related decline of 2.1 percent.
In this second of three estimates for the April-to-June period, the increase in nonresidential fixed investment was larger than previously reported, while the increase in private inventory investment was smaller than previously estimated.
Interestingly, the Congressional Budget Office just released a downwardly revised estimate of 1.5 percent for 2014 economic growth (previously, it was 3.1 percent), meaning that they’re not very optimistic about the second half of the year. With an average growth rate of 1.05 percent for the first six months, this puts second half growth at just over a 2 percent rate meaning that, once again, a strong “second half rebound” is not likely to materialize.