NewzFrance is the second-biggest economy in the European Union after Germany. (EPA Images pic)PARIS: France's economy returned to growth in the second quarter of this year after contracting slightly in the first period, statistics office INSEE said Thursday in its first estimate.The second-biggest economy in the European Union recorded growth of 0.2%, INSEE said, up from a contraction of 0.1% in the previous quarter, owing to stronger domestic demand and healthier export figures.The increase in economic output (GDP) between April and June was in line with predictions from the Bank of France.The figure was, however, lower than the 0.3% that INSEE had previously forecast. Consumer spending, which accounts for more than two-thirds of US economic activity, likely accelerated after abruptly slowing to a 0.5% growth pace in the first quarter.
(EPA Images pic) WASHINGTON: The US economy likely maintained a steady pace of growth in the second quarter, supported by stronger consumer spending and robust business investment in equipment tied to the buildout of artificial intelligence infrastructure.The commerce department's advance gross domestic product report on Thursday is expected to show the economy largely weathering the Middle East conflict, in part thanks to bigger tax refunds this year, which provided a cushion for consumers against higher gasoline prices stemming from the war.But economists warned that the US-led war with Iran, now in its sixth month, posed a downside risk to growth in the second half of the year."The US has been much more insulated from the economic fallout from the conflict in the Middle East than other parts of the world have been," said James Knightley, chief international economist at ING. "The consumer is still spending, and we have the ongoing frenzied tech investment cycle that we're seeing."A Reuters survey of economists forecasts GDP likely increased at a 2.1% annualised rate last quarter, which would match the January-March quarter's pace. Estimates ranged from as low as a 0.8% rate to as high as a 2.9% pace.The survey was, however, conducted before the release of June's advance economic indicators report, which showed a moderate contraction in the goods trade deficit and retail inventories unchanged.
Economists at JPMorgan lowered their GDP growth estimate to a 1.5% rate from a 2.0% pace after the data.Trade could subtract as much as a full percentage point from GDP growth, economists estimated. Inventories were a wild card.Consumer spending, which accounts for more than two-thirds of US economic activity, likely accelerated after abruptly slowing to a 0.5% growth pace in the first quarter. In addition to generous tax refunds from President Donald Trump's "One Big Beautiful Bill", higher-income households who are benefiting from strong growth in asset prices are also driving spending.The recently ended Fifa World Cup tournament also helped to spur spending, as did midterm election-related spending by nonprofits.
Economists are bracing for a slowdown in consumer spending as some of these tailwind…
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