The US economy expanded an annualized 2.4% qoq in the second quarter of 2023, higher than 2% in the previous period and way above market expectations of 1.8%, the advance estimate showed. Nonresidential fixed investment accelerated sharply (7.7% vs 0.6%), led by a rebound in equipment (10.8% vs -8.9%) and intellectual property products (3.9% vs 3.1%). Also, private inventories added 0.14 percentage points to the growth (vs -2.14 in Q1). On the other hand, consumer spending slowed sharply (1.6% vs 4.2%) but still, overshot market estimates as inflation eased but the labor market remained tight. While consumption of goods slowed sharply (0.7% vs 6%), spending on services remained strong (2.1% vs 3.2%). Also, public expenditure increased at a much softer pace (2.6% vs 5%) and net trade weighed down on the growth by subtracting 0.12 percentage points as exports were down 10.8% and imports dropped at a smaller 7.8%. Residential investment continued to decline (-4.2% vs -4%).
