GDP Growth Rate 3% in Second Quarter

The Commerce Department said in late August that the GDP growth rate was at 3% from April to June. This growth in the second quarter is far better than what we saw in the 1st quarter, which was around 1.2%.  As we learned in class, an increase in consumption and investment would lead to an increase of GDP and that is exactly what we see here. The increase in both consumption and business investment actually caused growth that hasn't been seen in the last couple of years.

It isn't enough to sat that consumption and investment rose. In order to fully understand what is going on in the economy you must look deeper. Consumer spending actually rose right above 3% and the main reason for the increase was that not only are consumers spending more on goods and services but car purchases rose. It is a great sign to see an increase in car purchases for it usually has an accurate read on growth in the economy. Moreover, the economy saw a 0.6% increase in investments. This combination led the GDP growth rate to break 3%.

However, in order to get a full grasp of the economy we must look at other factors such as inflation. The economy saw that the rate of inflation fell from 2% to right around 1.6% which is a great sign. This means that prices are not increasing faster than the GDP which is a good sign of a growing economy. Although, there are several factors that one must look at to understand everything in the economy, these are just a few factors that play a role in our vast economy. 

http://www.marketwatch.com/story/us-economic-growth-hits-3-rate-in-second-quarter-2017-08-30