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By PAUL WISEMAN (AP Economics Writer)

WASHINGTON (AP) — The U.S. economy surprisingly accelerated to a 2.4% annual growth rate from April through June, showing continued resilience in the face of steadily higher interest rates resulting from the Federal Reserve’s 16-month-long fight to bring down inflation.

Thursday’s estimate from the Commerce Department indicated that the gross domestic product — the economy’s total output of goods and services — picked up from the 2% growth rate in the January-March quarter. Last quarter’s expansion was well above the 1.5% annual rate that economists had forecast.

Driving last quarter’s growth was a burst of business investment. Excluding housing, business spending surged at a 7.7% annual rate, the fastest such pace since early 2022. Companies plowed more money into factories and equipment. Increased spending by state and local governments also helped fuel the economy’s expansion in the April-June quarter.

Consumer spending, the heart of the nation’s economy, was also solid last quarter, though it slowed to a 1.6% annual rate from a robust 4.2% pace in the first quarter of the year. read more

By KEN SWEET (AP Business Writer)

NEW YORK (AP) — The nation’s biggest and most complex banks will need to hold additional capital on their balance sheets under an initial proposal by the Federal Reserve and FDIC, designed to help banks better withstand risks to their businesses that go beyond a recession or financial crisis.

The proposal released Thursday, boiled down from highly complex and technical nuances, roughly means that Wall Street collectively will have to set aside tens of billions of dollars to meet the Fed’s new rules. Banks that rely more on fee income will see a greater impact than those holding bonds and other securities.

The main question addressed by the proposal is how banks over $100 billion in assets should value what are known as risk-weighted assets on their balance sheet when determining how much of a buffer the bank should have to withstand market gyrations and economic fluctuations. Risk-weighed assets have their origin in what is known as the Basel Accords, an international agreement among banks, whose most recent iteration known as Basel III came after the 2008 financial crisis. read more