U.S. GDP Climbs 2.3% In Second Quarter

The U.S. economy picked up modestly in the spring after a lackluster start to the year, expanding at an annual 2.3% rate in the second quarter. Growth was led by consumer spending on big-ticket items such as new cars as well as home construction, the government said Thursday. Economists polled by MarketWatch had expected a seasonally adjusted 2.8% gain. Consumer spending, the main engine of U.S. growth, rose 2.9%. Business investment minus housing dipped 0.6%. Home construction outlays rose 6.6%. The value of inventories fell slightly to $110 billion from $112.8 billion. Exports rose 5.3% while imports increased 3.5%. Inflation as measured by the PCE price index increased at a 2.2% annual rate after declining by a 1.9% pace in the first quarter. Excluding food and energy, core PCE rose to a 1.8% annual pace from 1% in the first three months of the year. In the first quarter, GDP was revised up to show a 0.6% gain instead of a 0.2% contraction, based on new methodology meant to make the report more accurate.