US GDP revised up in Q2

The gross domestic product (GDP) of the United States, Mexico’s main trading partner, grew 3 percent in the second quarter of the year, exceeding the first estimate, which had been 2.8 percent, reported the Bureau of Economic Analysis (BEA).

The improvement was explained by the fact that personal consumption rose 2.9 percent instead of 2.3 percent, as initially reported. Analysts had expected the figure to remain unchanged at 2.8 percent; however, the statistics showed better data on investment and consumption, the main drivers of the US economy.

The second estimate, which replaces the data released in July, indicates that the acceleration of private consumption could offset the downward revision of investment, exports and government and residential spending, according to the BEA.

The upward revision reflects improved results in consumer spending, which rose from 2.3 to 2.9 percent, mainly due to the increase in services, from 2.2 to 2.9 percent, which was partially offset by a lower estimate of exports and investment.

Investment was one of the most dynamic components, growing 7.5 percent, although it was revised down from 8.4 percent in the first reading. Of note was the 2 percent drop in residential investment from the 16 percent growth seen in the first quarter of 2024.

External dynamics

In the external sector, imports continue to show great dynamism, growing 7 percent from 6.1 percent in the first quarter, with an increase of 7.8 percent in purchases of goods and 3.6 percent in imports of services. Exports continue to make a low contribution to growth, increasing 1.6 percent, the same rate as in the previous quarter.

Compared to the second quarter of 2023, GDP growth in the period was 3.1 percent, unchanged from the July advance.

While the 3 percent annualized growth in the United States in the second quarter is much higher than the 1.4 percent growth in the first three months of this year and shows a solid economy that could complicate the Federal Reserve’s (Fed) attempts to contain inflation, economic activity in Mexico advanced at 1.5 percent.

While the economy remained resilient during the second quarter of 2024, the labor market is beginning to show less strength, while interest rates remain high, so we expect a slowdown in the second half of the year. We still maintain our estimate of 2.2 percent growth for U.S. GDP in 2024.anticipates the Citibanamex analysis area.