US Economy Grew at a Stronger Pace in Second Quarter

The US economy grew at a slightly stronger pace in the second quarter than initially reported, reflecting an upward revision to consumer spending that more than offset weaker activity in other categories. Gross domestic product rose at a 3% annualized rate during the April-June period, up from the previous estimate of 2.8%, according to Bureau of Economic Analysis figures published Thursday. The economy’s main growth engine—personal spending—advanced 2.9%, versus the prior estimate of 2.3%. Growth has cooled so far this year after accelerating in the second half of 2023. Forecasters see further moderation for the remainder of 2024 as high borrowing costs continue to filter through the economy. At the same time, the Federal Reserve is set to begin lowering interest rates next month as inflation continues to slow, which may provide some relief to sectors heavily impacted by borrowing costs like housing and manufacturing. More consumer spending data is set to land on Friday.

Chris Stansbury may have been the most hated person in the room as he made the rounds at one of Wall Street’s biggest leveraged finance conferences late last year. The Lumen finance chief was in the process of carrying out one of the largest and most controversial distressed-debt exchanges ever, and creditors stuck on the outside looking in were furious. For those at the gathering, nothing captured the tension more than the sight of a man in a buttoned-up suit, backpack slung over his shoulder, appearing to guard Stansbury as he worked the room. Some attendees joked that his presence brought to life the phrase buzzing through the market: “creditor-on-creditor violence.” Fast forward to today, and the deal has become one of the most successful distressed trades of the year, even for those that got left behind.