U.S. GDP surged by 4% in the second quarter of 2014, beating analysts’ forecasts and more than compensating for the previous quarter’s severe contraction, according to new figures released by the Bureau of Economic Analysis on Wednesday.
Analysts had forecast growth rates ranging between 2 to 3%, but the economy bounced back with stronger-than-expected rebounds in consumer spending, exports, and business inventories. The growth wiped out the declines of the first quarter, when the economy contracted by 2.1%, one of the sharpest declines in 5 years. Now, with the second quarter’s rebound, the economy has grown by 0.9% in the first half of the year.
The growth was led by a rebound in consumer spending, which took a hit in the previous quarter due to severe winter weather. This quarter consumer spending grew by 2.5%, compared with 1.2% in the previous quarter. Durable goods, in particular, surged by 14%.
Exports flipped from a decline of 9.2% in the first quarter to a 9.5% increase in the second quarter.