The US economy is surging

• Real gross domestic product, or real GDP, grew at an annualized rate of 2.4%.
• That advance estimate for the second quarter beat the 1.8% increase expected.

The US economy was seeing growth surge in the second quarter of 2023, according to new data out Thursday morning.

According to the Bureau of Economic Analysis, real gross domestic product, or real GDP, grew at an annualized rate of 2.4% in the second quarter of 2023. That beats the 1.8% forecast. This exceeds the 2.0% growth seen in the first quarter of the year and doesn't follow the trend the US has been seeing of slowing economic growth.

According to the news release out Thursday morning, this surge in the real GDP was in part due to consumer–spending growth. The release said that the "increase in consumer spending reflected increases in both services and goods." Housing and utilities was one of the major contributors under services, while gas and other energy goods was one of the leading contributors on the goods side.

Thursday's report highlighted the advance estimate for economic growth in the most recent quarter, so it could be revised as the BEA collects more data in the coming months. The advance estimate in the first quarter of 2023 showed a dramatic slowdown, yet the third estimate showed that cooling wasn't actually that massive as initially estimated.

It's the latest sign of a good economy. There continues to be low unemployment in the US and slower but strong job creation. Inflation and core inflation as measured by the Consumer Price Index has also been cooling, and the Federal Reserve on Wednesday announced an interest rate hike following a pause in June.

While recently released housing data shows new single-family houses sold dropped from May to June, Comerica Bank's chief economist Bill Adams said in a statement prior to Thursday's GDP release that despite this, "new home sales are recovering, and contributed to GDP growth in the second quarter."

And even though some experts believe a recession may happen, many other experts and economists don't see a recession coming soon. The Fed staff also doesn't see a recession on the horizon, according to Federal Reserve Chair Jerome Powell on Wednesday.

"The staff now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession," Powell said.

And while one survey of businesses suggests some are worried a recession could be coming, the new GDP report suggests that businesses are still investing.

"Compared to the first quarter, the acceleration in GDP in the second quarter primarily reflected an upturn in private inventory investment and an acceleration in nonresidential fixed investment," Thursday's news release from the Bureau of Economic Analysis said. "These movements were partly offset by a downturn in exports, and decelerations in consumer spending, federal government spending, and state and local government spending. Imports turned down."

A recent GDP preview from Gregory Daco, chief economist of EY, also highlighted strength in the US economy and what it may mean.

"General labor market resilience, moderating inflation and gently slowing final demand growth offer hope of an economic soft landing," Daco said. "With headline inflation cooling rapidly, real wage growth is turning positive providing a tailwind to consumer spending."

"Simultaneously, the need to address supply shortages across the economy has supported robust construction activity, prevented a severe manufacturing pullback, and helped price and wage pressures ease," Daco added. "Still, the economy continues to face significant headwinds from persistently elevated prices and costs, tightening credit conditions and rising interest rates. Union strikes, student loan repayments and corporate debt vulnerabilities also represent downside risks."

The personal saving rate also climbed slightly from the first to the second quarter per the news release, growing from 4.3% to 4.4%. That's also much higher than the 3.2% seen in the second quarter of 2022.

This is a developing story. Please check back for updates.