The U.S. economy grew at an expected pace during the second quarter of this year. Real gross domestic product increased at an annual rate of 2.99% in Q2 2024, according to the final estimate. The latest estimate is the same as the forecasted 3.0% growth and is a pickup from the Q1 2024 GDP final estimate of 1.6%.

Here is the opening text from the Bureau of Economic Analysis news release:

**Real gross domestic product** (GDP) increased at an annual rate of 3.0 percent in the second quarter of 2024, according to the "third" estimate released by the U.S. Bureau of Economic Analysis. In the first quarter, real GDP increased 1.6 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was also 3.0 percent. The update primarily reflected upward revisions to private inventory investment and federal government spending that were offset by downward revisions to nonresidential fixed investment and exports. Imports, which are a subtraction in the calculation of GDP, were revised up.

**Gross Domestic Product (GDP)**

Real gross domestic product (GDP) measures how fast or slowly the economy is growing and measures the inflation-adjusted value of all goods and services produced by the economy. It is considered the broadest measure of economic activity and the primary indicator of an economy's health. The Bureaus of Economic Analysis (BEA) releases real GDP data on a monthly basis. There are 3 versions released a month apart, advance, second, and final, each incorporating data that was previously unavailable. Economists can use GDP to determine whether an economy is growing or experiencing a recession.

Here is a look at quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows the annualized percentage change from the preceding quarter in real (inflation-adjusted) gross domestic product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.21% average (arithmetic mean) and the 10-year moving average, currently at 2.75%. As you can see, the 10-year moving average is below the historical average, illustrating that US economic growth has slowed dramatically since the Great Recession.

We are currently at a level above the 10-year moving average but below the series average, indicating that the current economic growth is on the historically slower end.

The chart above has many interesting data points but can be quite overwhelming to look at. This next chart is a simplified version starting in 2007.

Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The regression illustrates the fact that the current trend, since the Great Recession, has a visibly lower slope than the long-term trend. In fact, the current GDP is 12.6% below the pre-recession trend (2008).

A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. Beginning in 1947, the average year-over-year rate at the start of recessions is 3.2% with a range of 1.28% to 6.78%. The current year-over-year rate for real GDP is at 3.04%, a level at or below 5 of the 12 recession starts during this time frame.

**GDP: A Look Ahead**

In the chart below, we use the Conference Board's Economic Forecast for the U.S. Economy to visualize GDP forecast over the next few years.

Real GDP is expected to rise by 2.4 percent year-over-year in 2024. Nonetheless, the economy is expected to lose momentum in H2 2024 as high prices and elevated interest rates sap domestic demand. This will provide slower momentum heading into 2025, which may constrain growth in that year to just 1.7 percent year-over-year, despite expectations of stronger quarterly annualized growth as the year progresses.

For a closer look at each of the subcomponents of GDP, check out our commentary An Inside Look at GDP.

For another perspective on GDP, check out our commentary Real GDP Per Capita.

Read more updates by Jen Nash