It seems that there is a never ending stream of economic data coming from all directions. Actually, that is true. However, it usually isn’t as dynamic as it has recently been. Typically, the economy moves in one direction, at one speed for a certain period and then adjusts and moves in a mostly predictable manner yet again. However, with the U.S. economy still recovering slowly from the Great Recession, things seem to be a little more erratic.
The latest economic data, released Wednesday, suggests a big bounce back from the surprising decline from earlier this year. If you remember, the beginning of the year, a major weather system in the northeast knocked the economic recovery off track, and led to a mixed mid-year review of the American economy. While every major economist at the time considered the dip to be a temporary phenomenon, things got even trickier when the already down news was revised further downward. The latest data suggest that the recovery is back on track for this year, at least.
The U.S. economy grew at an annual pace of 4 percent in the second quarter. (There is a misconception that this means the economy actual grew the full 4 percent during the quarter. That is not correct. This data means that if the economy grew at the same rate for the whole year as it did in the second quarter, then the growth rate for the year would be 4 percent.) In addition, consumer spending increased, and more jobs were added to the economy as well.
Overall, the results were much more positive than economists were predicting. Data can be revised after as more information comes in, but if these numbers stick around, then this is good news for those hoping the economy can finally get fully turned around and back into a real expansion going forward.