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CNN VALUES YOUR FEEDBACK 1. How relevant is this ad to you? 2. Did you encounter any technical issues? No Video player was slow to load content Video content never loaded Ad froze or did not finish loading Video content did not start after ad Audio on ad was too loud Other issues Ad never loaded Ad prevented/slowed the page from loading Content moved around while ad loaded Ad was repetitive to ads I've seen previously Other issues Cancel Submit Thank You! Your effort and contribution in providing this feedback is much appreciated. Close Ad Feedback Close icon Business Markets Tech Media Calculators Videos More Markets Tech Media Calculators Videos Watch Listen Live TV Sign in My Account * Settings * Topics You Follow * Sign Out Your CNN account Sign in to your CNN account Sign in My Account * Settings * Topics You Follow * Sign Out Your CNN account Sign in to your CNN account -------------------------------------------------------------------------------- Live TV Listen Watch -------------------------------------------------------------------------------- Edition US International Arabic Español Edition * US * International * Arabic * Español -------------------------------------------------------------------------------- Markets Tech Media Calculators Videos Follow CNN Business * * * -------------------------------------------------------------------------------- * World * Africa * Americas * Asia * Australia * China * Europe * India * Middle East * United Kingdom * US Politics * SCOTUS * Congress * Facts First * 2024 Elections * Business * Tech * Media * Calculators * Videos * Markets * Pre-markets * After-Hours * Fear & Greed * Investing * Markets Now * Before the Bell * Nightcap * Opinion * Political Op-Eds * Social Commentary * Health * Life, But Better * Fitness * Food * Sleep * Mindfulness * Relationships * Entertainment * Movies * Television * Celebrity * Tech * Innovate * Foreseeable Future * Mission: Ahead * Work Transformed * Innovative Cities * Style * Arts * Design * Fashion * Architecture * Luxury * Beauty * Video * Travel * Destinations * Food & Drink * Stay * News * Videos * Sports * Football * Tennis * Golf * Motorsport * US Sports * Olympics * Climbing * Esports * Hockey * Watch * Live TV * CNN Fast * Shows A-Z * CNN10 * CNN Max * CNN TV Schedules * Listen * CNN 5 Things * Chasing Life with Dr. Sanjay Gupta * The Assignment with Audie Cornish * One Thing * Tug of War * CNN Political Briefing * The Axe Files * All There Is with Anderson Cooper * All CNN Audio podcasts * Science * Space * Life * Unearthed * Climate * Solutions * Weather * Features * As Equals * Call to Earth * Freedom Project * Impact Your World * Inside Africa * CNN Heroes * Weather * Video * Climate * Ukraine-Russia War * Israel-Hamas War * Paris Olympics * About CNN * Photos * Investigations * CNN Profiles * CNN Leadership * CNN Newsletters * Work for CNN Markets DOW 39,191.70 +194.04 0.50% S&P 500 5,303.42 +63.39 1.21% NASDAQ 16,665.56 +298.70 1.83% Hot Stocks NVDA NVIDIA Corporation 104.25 + 3.80 3.78% LUMN Lumen Technologies, Inc. 5.00 + 2.41 93.05% F Ford Motor Company 9.78 + 0.07 0.72% Fear & Greed Index 24 extreme fear is driving the US market Latest Market News What you should do with your 401(k) in a highly volatile market How interpreters are helping this Indiana plant address its labor shortage Here’s who to blame — and who not to blame — for the slumping US economy Hot Stocks 24 extreme fear is driving the US market Something isn't loading properly. Please check back later. Ad Feedback Business / Economy WHAT YOU NEED TO KNOW ABOUT AMERICA’S SHOCKINGLY GOOD ECONOMIC REPORT By Bryan Mena, CNN 4 minute read Updated 3:12 PM EDT, Thu July 25, 2024 Link Copied! A family views shoes at a Sketchers retail store at the Barton Creek Square Mall on July 16, 2024 in Austin, Texas. Brandon Bell/Getty Images Washington CNN — The US economy just got its latest health check, and it looks promising. Gross domestic product, which measures all the goods and services produced in the economy, registered at a robust 2.8% annualized rate in the second quarter, after adjusting for inflation and seasonality, the Commerce Department said Thursday. That’s double the 1.4% rate seen earlier this year, and well above the 1.9% rate economists projected in a FactSet poll. A closer look shows that key parts of the economy improved from April through June compared to the prior three months, despite the highest interest rates in nearly a quarter century and persistent price pressures. Ad Feedback The government’s GDP report isn’t always easy to decipher. Sometimes the headline number masks trends under the surface. But this time, there’s no mistaking that the American economy is truly on solid footing, from consumers to businesses. It also shows that the economy could pull off an extremely rare “soft landing.” That’s when inflation comes under control without the economy slipping into a recession, something that experts say has only happened once before, during the 1990s. Here are some key takeaways from Thursday’s GDP release. Ad Feedback AMERICA’S ECONOMIC ENGINE IS STILL REVVING — AND INFLATION IS SLOWING Consumer spending accounts for the vast majority of the US economy, about 70% of it. Spending accelerated sharply in the second quarter to an annual rate of 2.3%, up from 1.5% in the first quarter, as consumers spent a bit less on services but much more on goods. Separate data on spending shows that American shoppers are still shopping. Retail sales, excluding purchases at car dealerships, surged last month, including spending at restaurants and bars. Within the GDP report, there is a specific measure that is a good gauge of consumer demand in the economy, affectionately known as “final sales to private domestic purchasers” (don’t try to say that three times in front of a mirror.) That measure strengthened in the second quarter, rising to a 2.9% rate compared to 2.6% seen earlier this year. Generally, one risk that comes with an economy that’s expanding robustly is that price pressures can either get stuck or heat up. That’s not what happened in the second quarter. The report showed that inflation slowed from April through June, compared to the prior three-month period, even as economic growth accelerated. That’s a crucial development for the Federal Reserve, which is widely expected to pare back interest rates from a 23-year high in the coming months. “Buried deep in this report is good news on the inflation front, the PCE (Personal Consumption Expenditures) price index dipped below 3%—that’s substantial further progress on the road to a September rate cut,” said Jamie Cox, managing partner for Harris Financial Group, in a note Thursday. The Commerce Department on Friday releases June figures on household income, spending and the PCE price index (the Fed’s favorite inflation measure), though Thursday’s GDP release already offered a sneak peek. BUSINESSES ARE STILL SPENDING, BUT LESS ON THIS Businesses invested much more in the second quarter than in the first three months of the year. In fact, the contribution from business investment toward GDP actually doubled in the April-through-June period. The measure for that — known as “nonresidential fixed investment” — rose to a 5.2% rate in the second quarter, up from 4.4% in the first quarter. That was largely driven by a sharp acceleration in spending on “equipment,” which encompasses everything from laptops to milling machines. This development is important because businesses put their money where their mouths are, so the pickup in this category shows that businesses believe the outlook is good enough to invest in. “The story all along has been corporate investment. The consumer is healthy, but investment grew almost double digits over the last quarter,” Scott Helfstein, senior vice president and head of investment strategy at Global X, said in a note Thursday. “Companies are investing in automation and digitalization, which will drive margins higher, and valuations will continue to follow.” The one weak spot in the business investment category was a steep decline in spending on “structures,” or physical buildings, which declined 3.3% in the second quarter, down from the 3.4% gain seen previously. That pullback likely reflects the effects of still-high interest rates. “Elevated borrowing costs and tight bank lending standards will (continue to) pose headwinds for equipment spending and some facets of structures,” Oren Klachkin, financial markets economists at Nationwide, said in a note. “But we think that tech-related investment will continue to rise.” Related MORE FROM CNN Here’s who to blame — and who not to blame — for the slumping US ... Aug 7, 2024 Dow closes nearly 500 points lower as investors fear the US economy is ... Aug 1, 2024 Kamala Harris’ economic pitch just got a lot more complicated Aug 5, 2024 Ad Feedback CNN BUSINESS VIDEOS Clipped From Video Video What a huge drop for stocks may signal about U.S. economy 4:37 Aug 5, 2024 CNN Video Why the stock market is freaking out, but you shouldn’t 1:08 Aug 5, 2024 Michael M. Santiago/Getty Images/File Video Uncertainty among Americans grows continuously after weak jobs report 2:54 Aug 3, 2024 Spencer Platt/Getty Images Video US economy adds far fewer jobs than expected. 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