US economy grows a little less than expected in Q2

The US economy grew a little less than expected in the second quarter, according to data released by the Commerce Department on Friday.

Gross domestic product accelerated at an annual rate of 2.6% in the second quarter, missing analysts' expectations of 2.8% growth. Meanwhile, first-quarter growth was revised down to 1.2% from a previous estimate of 1.4%.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures, non-residential fixed investment, exports, and federal government spending that were partly offset by negative contributions from private residential fixed investment, private inventory investment, and state and local government spending.

Capital Economics said the data suggests that GDP is still on track for growth of around 2.2% for 2017 as a whole.

"This should convince the Fed that, despite the recent weakness of core inflation, the real economy remains in good shape.

"Looking ahead, the strengthening labour market should continue to support real consumption growth, while the business surveys remain at a high level and suggest that investment will continue to recover. Accordingly, we still expect GDP growth of 2.5%-3.0% over the rest of this year which, along with the declining unemployment rate, should leave the Fed on track to raise interest rates once more before year-end."