US economy grew at an impressive 4.6 percent annual rate in Q2 2014

The US economy has rebounded, with the economy growing at a 4.6 percent annual rate in Q2, according to the Commerce Department.

Second quarter growth was at the best pace since 2011. The impressive growth was fueled by an increase in investments and higher household spending.

In addition, the Commerce Department says that this is also because of the sudden surge in exports.

Gross household products increased at a 4.6% annual rate, which was an increased from predicted revise of 4.2%. This is the third time that that the the real gross domestic product (GDP) in Q2 estimate has been revised.

Earlier this year the economy shrank by 2.1 percent, representing the first contraction in the economy in three years. Although this was mainly a weather-related winter contraction, with business activity lost in the first three months of the year.

Acording to the monthly Thomson Reuters/University of Michigan survey of consumers, US consumer sentiment reached a 14-month high in September, with the American outlook for the overall economy improving. The consumer sentiment index was 84.6 in September, up from 82.5 in August.

Richard Curtin, the survey’s director, said in a statement:

“Consumer confidence posted a healthy September gain due to more favorable prospects for the domestic economy as well as more favorable personal income expectations.”

All in all, the economy seems to be on track and there is momentum, which begs the question for many, when will the Fed be decreasing rates?

A dovish Fed, with two hawkish Presidents announcing retirement, could suggest that it won’t happen until mid next year. Although, with these impressive figures could there be a change in sentiment?

Federal Reserve Bank of Chicago President, Charles Evans, on Wednesday said:

“We should be exceptionally patient in adjusting the stance of U.S monetary policy — even to the point of allowing a modest overshooting of our inflation target to appropriately balance the risks to our policy objectives.”