The economy is doing well

The U.S. economy accelerated in the second quarter as consumers increased their spending, businesses invested more in equipment and stocked inventories, and inflation cooled.

Gross domestic product—the value of all goods and services produced in the U.S., adjusted for inflation and seasonality—rose at an annual rate of 2.8% for April through June to $22.9 trillion, the Commerce Department said Thursday.

That was faster than the 1.4% pace in the first quarter, and well above the 2.1% rate economists had expected. Household spending, the main driver of the U.S. economy, increased at a quicker pace as Americans’ incomes continued to rise

Stocks ended the day mixed. The Dow Jones Industrial Average was up slightly. The S&P 500 fell.

The new data shouldn’t change the outlook for the Federal Reserve. Officials have signaled that they expect to hold interest rates steady at their meeting next week but could cut at their subsequent meeting, in September, if inflation continues to cool.

Thursday’s release is one of the last major readings of the economy’s temperature that Fed officials will see before their meeting. The report suggests that the economy remains on solid footing, even two years after soaring inflation prodded the Fed to start raising rates at the fastest pace in decades. But the report also looks at previous months rather than what’s coming up. Companies have been warning that customers are feeling squeezed, and that they expect that to continue.

“The U.S. consumer remains a source of strength in the overall economy,” Capital One Financial Corp.founder and CEO Richard Fairbank said during an earnings call Tuesday. Still, the effects of high inflation and borrowing costs “are almost certainly stretching some consumers financially,” he said.