An indicator of what’s ahead in the third quarter came at the same time Thursday, with U.S. durable goods orders in August jumping 4.5 percent against expectations of just 2 percent. Durables rose 8.6 percent in the second quarter after a 2 percent decline in the earlier three-month period. However, most of the jump came in aircraft orders. Underlying orders were not nearly as robust.
The GDP reading comes as the economy seems to be firing on nearly all cylinders, with a sluggish housing sector being the lone exception. Consumer confidence recently hit an 18-year high, small business optimism is also around record highs and corporate profit increases have been running at 25 percent this year.
Citing a stronger economy, the Federal Reserve on Wednesday approved another quarter-point hike in its benchmark interest rate.
Second-quarter growth was fueled by higher spending in both the public and private sectors as well as business investment. Imports fell while exports were higher. The gains were partially offset by a decline in private inventory investment.
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