Sumbrime-lending and housing-market woes didn't hold back the rest of the economy in the second quarter, as overall growth exceeded expectations and hit a 3.4% projected annual rate, the government said today. Economists pointed to the expanding global economy, which drives demand for exports, as well as greater business investment and government spending to explain the jump.
Analysts expressed hope that the good news, which came at the end of a weeklong stock-market selloff, will help restore global confidence in the US economy despite the housing slump and a slowdown in consumer spending, Bloomberg reports. The growth rate was just 0.6% in the first quarter, and economists aren't sure the trend will last. (Read more economic growth stories.)