Q2 2024 US GDP was revised higher due to stronger consumer spending

The second version of the US GDP reading has been updated to show a a faster expansion of 3.0% in Q2 2024 up from the initially reported figure of 2.8%. This also reflected a significant acceleration in economic growth compared to Q1 2024 GDP of 1.4%.

The positive revision of the preliminary GDP reading came in largely higher consumer spending on services and goodsespecially gasoline and other energy products.

However, components of the report showed that non-residential fixed investment, exports and private investment in inventory were downgraded.

Link to preliminary US GDP for Q2 2024

Meanwhile, the preliminary price index for the same period it also enjoyed an upgrade from 2.3% to 2.5% instead of remaining unchanged as expected. Excluding volatile food and energy prices, the PCE price index for the period is up 2.8%, down 0.1% from the initial estimate.

US Dollar vs. Major Currencies: 5 min

USD chart overlay against major currencies by TradingView

The greenback, which had moved mostly sideways with a slight upward tilt leading into the preliminary GDP release, rose sharply after seeing improvements in both growth and inflation.

The initial weekly claims report released at the same time also came in slightly better than expected at 231,000 versus the consensus of 232,000 and the previous increase of 233,000.

The USD posted the biggest gain against the JPY, followed by the CHF and NZD, although the gains soon faded a few hours after the GDP figures were printed. Weaker-than-expected pending home sales released later reflected a steeper-than-expected 5.5 percent monthly decline in July, pushing contracts to their lowest level since 2001.