The U.S. economy grew at a faster pace than expected at the beginning of 2024 as consumers continued to open their wallets despite ongoing inflation and high interest rates. 

Gross domestic product, the broadest measure of goods and services produced across the economy, grew by 2.8% on an annualized basis in the three-month period from April through June, the Commerce Department said in its first reading of the data on Thursday. 

That is much higher than the 2% increase forecast by LSEG economists and the 1.4% pace seen during the first quarter. 

The U.S. economy grew at a 2.8% annualized rate in the second quarter—a faster rate than economists expected as consumer spending increased and businesses built up inventories, the Commerce Department said on Thursday.

Why it matters: The new data raises confidence the economy has achieved a "soft landing" — healthy economic growth alongside cooling inflation.

Economists expected an annualized growth rate of 1.9% last quarter. The economy grew at a 1.4% rate in the first three months of the year.

The U.S. economy accelerated in the second quarter as consumers increased their spending, businesses invested more in equipment and stocked inventories, and inflation cooled.

Gross domestic product—the value of all goods and services produced in the U.S., adjusted for inflation and seasonality—rose at an annual rate of 2.8% for April through June, the Commerce Department said Thursday. That was more than the 1.4% rate during the first quarter, and well above the 2.1% rate economists had expected before the report.