U.S. gross domestic product (GDP) grew at a far faster rate in the first quarter than initially estimated, according to data released Thursday, hitting a 2 percent annualized growth rate.
The new figures are up substantially from the 1.3 percent growth rate estimated by the Bureau of Economic Analysis earlier this year.
The BEA releases three estimates of GDP growth for each quarter, and small revisions are common as the agency takes in more data.
But the size of Thursday’s update drew attention from economists, who called the increase yet another sign of the U.S. economy’s resilience.
“Given the current state of the economy, a recession is unlikely to start in [the third quarter],” wrote Oren Klachkin, lead U.S. economist at Oxford Economics.
“We still think that a recession is more likely than not, though a ‘soft landing’ cannot be entirely ruled out,” he continued, referring to when a period of high inflation ends without a recession.
Economists have insisted for more than a year that the Federal Reserve’s rapid interest rate hikes — which are meant to cool inflation — would eventually drive the U.S. into a recession.
While the U.S. economy has cooled off from its torrid post-pandemic rebound, it remains far from recessionary levels.
The economy is adding jobs at a steady pace and the May jobless rate of 3.7 percent was just 0.2 percentage points above its pre-pandemic level.
Consumer spending has also held up strong, jobless claims are at pre-pandemic averages and inflation has fallen to a 4 percent annual rate.
Sylvan Lane has more here.
