The hope for ecomomic recovery is on track after a surprisingly strong report on gross domestic product growth.

The Commerce Department reported that gross domestic product grew at a 2.4 percent annual rate in the second-quarter, up from 1.4 percent in the first quarter and much faster than the 1.5 percent economists surveyed by Reuters were expecting. The growth was attributed mostly to increases in consumer spending and federal government spending, particularly on defense.

In addition, the number of Americans filing new claims for unemployment benefits last week fell for the second week in a row, with claims down to 388,000 from a revised 391,000 the previous week. Economists expected a rise to 400,000. 

"Accelerating GDP growth certainly bodes well for future economic activity. And though the report showed the impact of defense spending, it also showed that corporations are starting to spend more, too," an analyst said.

On the other hand, the Chicago Purchasing Managers' Index for July rose to 55.9 from 52.5 in June, better than the 54 reading economists surveyed by Reuters were expecting. That reassures the hope for market recovery is on track.

By: DocMemory
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