Strong Growth in Consumer Spending and Business Investment

Q2 of 2004 saw significant economic growth in two key areas: consumer spending and business investment. Entrepreneurs blazed the trail in the current economic expansion, and now the other major segments are following this lead.
“The Bureau of Economic Analysis (BEA) announced today that the gross domestic product (GDP) grew at a seasonally-adjusted annual rate of 2.8 percent during the 2nd quarter of 2004. Major contributors to growth during the 2nd quarter were consumer spending and business investment. Over the past year, GDP has increased by 4.7 percent. Average quarterly growth during the 1990s was 3.3 percent.
Highlights:
* GDP grew at a seasonally-adjusted annual rate of 2.8 percent during the 2nd quarter of 2004. GDP increased by 4.5 percent in the 1st quarter of 2004.
* Major contributors to GDP growth in the 1st quarter were consumer spending, which increased by 1.6 percent, and business investment, which increased by 12.1 percent.
* Business investment, the lack of which drove the economy into recession, has now increased for 5 consecutive quarters.
* A wider trade deficit (the difference between exports and imports) subtracted more than a percentage point from overall growth and offset the upward revisions to consumer spending and business investment.”
Source: Congressional Joint Economic Committee