The stronger-than-expected performance underscores the resilience of American consumers and businesses despite elevated interest rates.
• Gross domestic product grew at an annualized rate of 4.9 percent, according to the Commerce Department’s initial estimate.
• Consumer spending drove much of the increase, reflecting continued demand for travel, dining, entertainment and other services.
• Business investment and government spending also contributed to growth, while housing activity remained uneven under pressure from high borrowing costs.
• The report offers fresh evidence that the economy has so far avoided a widely anticipated recession, even as the Federal Reserve continues efforts to slow inflation.
• Economists caution that growth could moderate in the coming quarters as higher interest rates weigh more heavily on household budgets and corporate investment.
The figures provide a snapshot rather than a final verdict: GDP estimates are revised as additional data become available. Still, the robust quarter may complicate the Federal Reserve’s policy decisions as officials weigh whether inflation is cooling quickly enough to pause further rate increases.