The slowdown in GDP growth to 1.5% annualised in the second quarter will not sway the Fed’s view that the economy is “expanding at solid pace”, given that final sales to private domestic purchasers rose by an impressive 3.9% annualised. With monthly spending data providing a solid handover to third-quarter consumption growth and signs that the investment boom is broadening, the second-quarter GDP figure seriously undersells a healthy economy.
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