US GDP growth rises to 2.3 per cent in second quarter

Emma Haslett
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Analysts had expected a 2.5 per cent rise in GDP (Source: Getty)

Official statistics published today showed growth in the US hit 2.3 per cent in the second quarter, missing expectations of 2.5 per cent.

Read more: Fed keeps interest rate unchanged

However, the disappointing 0.2 per cent contraction originally posted in previous three months was revised to 0.6 per cent growth as statisticians changed the way they measured the figure during the traditionally lacklustre first quarter.

Second quarter growth was hit by an unexpected slowdown in retail sales in - figures published this month showed sales fell 0.3 per cent, missing economists' expectations of a 0.2 per cent rise

Meanwhile, the country reported an initial jobless claims figure of 267,000 during the quarter, beating estimates of 270,000.

The figure added fuel to the fire kindled by Federal Reserve chief Janet Yellen, who hinted last night at an upcoming hike in interest rates, although she refused to provide investors with any certainty over when that hike will come.

The dollar reacted with uncertainty, at first falling and then spiking as investors tried to work out what will happen next.

Part of the problem, suggested Oanda senior market analyst Craig Erlam, is the lack of inflation in the country.

"The decline in oil prices over the last 12 months played havoc with the numbers and the continued weakness in commodity prices is likely to continue to do the same," he said.

"The Fed seems confident that this will not impact inflation expectations and therefore future inflation rates but I think it's simply holding out for more evidence of this before acting. Especially as any rate hike will only add further downward pressure on inflation."

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