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Second Quarter Sees U.S. Economy Expand by 2.4%

The U.S. economy grew by 2.4% in the second quarter, as reported by the White House. This growth was accompanied by a significant slowdown in inflation, with consumer prices rising at a rate of 2.6%, down from 4.1% in the first quarter and over 7% in the first half of last year. The Federal Reserve’s pressure to raise rates has been relieved, leading some experts to question the likelihood of a recession. Federal Reserve Chair Jerome H. Powell stated that the central bank no longer expects a recession this year.

White House officials attributed the positive results to President Biden’s economic policies, such as investments in infrastructure and green energy. The Council of Economic Advisers highlighted the contribution of manufacturing facility investments, which accounted for over a third of a percentage point in overall GDP growth, the highest in over four decades.

President Biden himself referred to this data as evidence of the effectiveness of his economic plan, stating that it is “Bidenomics in action.”

Weiler, a manufacturer of paving and forestry equipment, has recently expanded its facilities in Knoxville, Iowa. Despite initially only using a quarter of the new space, the company is optimistic about future growth. According to Patrick Weiler, the company’s president and chief executive, demand has been strong in the post-pandemic period, and supply-chain disruptions have been resolved. He expects federal infrastructure spending to sustain sales even if private demand slows.

However, economists anticipate that consumer spending will decrease in the second half of the year, which could impact the recovery. Savings accumulated during the pandemic are diminishing, and credit card balances are increasing. Additionally, although unemployment remains low, job and wage growth have slowed. Blerina Uruci, chief U.S. economist at T. Rowe Price, suggests that the expected slowdown in consumption feels more like a delayed hard landing rather than its cancellation.

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