The U.S. economy is expected to grow at a 3.8 percent annualized pace in the second quarter based on a report that showed an increase in personal spending in April, the Atlanta Federal Reserve’s GDP Now forecast model showed on Tuesday.
The latest second-quarter gross domestic product estimate was faster than the 3.7 percent clip calculated on May 26, the Atlanta Fed said.
Meanwhile, U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded, pointing to firming domestic demand that could allow the Fed to raise interest rates next month.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is likely to remain on solid ground in the wake of other reports on Tuesday that showed confidence among households still at lofty levels despite some slippage this month and strong gains in house prices in March.
“Fed officials can continue with their