Economists anticipated lackluster economic growth last quarter. Instead, growth surged, a sign of the still-resilient economy.

Why it matters: The soft landing was very much intact this spring: Price pressures eased, but not at the expense of the strong economy and labor market.

What they're saying: "While these estimates will be revised a few times, they do point to the continued strength of the U.S. economy despite the high interest rate environment we've been in for over a year," NerdWallet senior economist Elizabeth Renter wrote this morning.

The big picture: The economy grew at an annualized 2.8% in the second quarter, up from the modest gain of 1.4% at the start of 2024.

• The consumer was the key driver of last quarter's strong economic growth. Personal consumption expenditures increased at a 2.3% annualized rate, gaining from the 1.5% pace in the prior period. That category contributed 1.6 percentage point to the increase in GDP figure.
• Another big contributor to growth: Businesses stocked up inventories at a strong rate, adding 0.8 percentage point to GDP. Given that consumer spending was so brisk last quarter, the stocking was likely to keep up with current demand — not to make up for prior shortfalls.

Capital spending rose at a 5.2% annualized rate, reflecting a surge in spending on equipment (+11.6%) and continued investment in intellectual property (+4.5%).

• The jump in spending on equipment and intellectual property "affirms our conjecture that the American economy is in the midst of a productivity boom that in turn will result in an improved standard of living across the economy for all cohorts," RSM economist Joe Brusuelas wrote in a note.

Between the lines: A narrower measure of growth affirms the economy's resiliency in the second quarter.

• Final domestic private sector sales — which strips out volatile categories like inventory shift, government spending and trade — increased at a 2.6% annualized rate, the same as the previous quarter.

The intrigue: The second quarter saw strong growth alongside lower inflation — a reversal of dynamics observed in the January to March period, when inflation resurged and headline GDP moderated.

• Still, other indicators point to potential risks for the economy. The unemployment rate has risen in recent months to 4.1%, the highest since 2021. Should the labor market lose steam, that could slow consumer spending and crimp the economy.

What to watch: The Federal Reserve holds a policy meeting next week. No rate changes are expected, though officials look likely to lay the groundwork for a rate cut in the fall.

Other data released this morning also lines up with a benign reading of the growth outlook.

Driving the news: The number of Americans filing new claims for jobless benefits fell last week to 235,000, from 245,000 the previous week, per Department of Labor data. The less-volatile four-week moving average was stable at 235,500.

• The number of continuing jobless claims also fell, to 1.851 million from 1.86 million.
• The jobless claims numbers shifted higher in April and May, but recent readings point to stabilization at those slightly higher — and not particularly alarming — levels.

There was a steep decline in new orders for durable goods in June, according to data out from the Census Bureau this morning — down 6.6%.

• But that was driven by the volatile aircraft sector. An indicator of underlying strength in business investment included in that report — new orders for nondefense capital goods excluding aircraft — rose 1% in June after falling in May.
• That points toward the strong equipment spending seen in the Q2 GDP numbers continuing through the summer.

What's next: The Commerce Department releases June personal income and consumption data tomorrow at 8:30am. It will also include the Personal Consumption Expenditures Price Index that the Fed targets.

• Those numbers are already factored into the Q2 GDP data released this morning.