GDP increased 6.5%, well below expectations but topping pre-Covid levels [View all]

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The U.S. economy rose at a disappointing rate in the second quarter in a sign that the U.S. has escaped the shackles of the Covid-19 pandemic but still has more work to do, the Commerce Department reported Thursday.

Gross domestic product, a measure of all goods and services produced during the April-to-June period, accelerated 6.5% on an annualized basis - slightly better than the 6.3% gain in the first quarter, which was revised down narrowly.

While that would have been strong prior to the pandemic, the gain was considerably less than the 8.4% Dow Jones estimate.

Gross private domestic investment fell 3.5% as declines in private inventory and residential investment held back gains.

Rising imports and a 5% decline in the rate of federal government spending also were factors, the Bureau of Economic Analysis report said.

The overall increase came thanks to increasing private expenditures, which rose 11.8% as private consumption accounted for 69% of all activity. Nonresidential fixed investment, exports and state and local government spending also helped boost output.

At: https://www.nbcnews.com/business/autos/gdp-increased-6-5-well-below-expectations-n1275377

Chef Sean Sherman at his newly-opened Owamni restaurant in Minneapolis.

Higher spending on food services and accommodation accounted for a full one third of growth in the second quarter - though the emergence of the Delta variant has clouded prospects for the sector moving forward.