Second quarter economic growth revised upward; Walgreens goes private with new CEO; Pending home sales decline

The U.S. economy grew at an annual rate of 3.3% in the second quarter, revised from a previously reported 3%, the Commerce Department reported Thursday. Consumer spending was among factors helping gross domestic product expand beyond analysts’ prior forecasts.

“There was an upward revision to business investment in structures, equipment and intellectual property, as well as consumer spending,” Ryan Sweet, chief U.S. economist at forecasting firm Oxford Economics, said in a statement. With the government’s second and final revision of second-quarter numbers set for next month, Sweet cautioned that economic risks remain in place, including pending effects of slowed hiring and increased trade tariffs.

“Investment related to AI is helping mask some of the weakness elsewhere in the economy, but the good news is that there is little sign that this support is set to fade anytime soon,” Sweet said.

The second quarter GDP rise came after the economy contracted 0.5% on an annual basis in the first quarter. Sweet noted second-quarter corporate profits posted 1.7% annual growth, “reversing a good chunk” of the 2.3% annual decline for the first quarter. 

Walgreens said Thursday it is now operating as a private, standalone company after investment firm Sycamore Partners completed its previously announced acquisition of the nearly 125-year-old drugstore chain. The Deerfield, Illinois-based operator of about 8,500 U.S. stores with 220,000 employees named former Staples CEO Mike Motz as its new chief executive, effective immediately.

Motz touted “an exciting new chapter and a turning point” for Walgreens, which has closed hundreds of stores in recent years in response to rising costs and slowing sales. “As a private organization, along with our dedicated team members, we are renewing our focus on our core pharmacy and retail platform, our stores and our customer experience — building on the progress that’s been made,” Motz said in a statement.

Sycamore Partners Managing Director Stefan Kaluzny said Walgreens’ private, standalone status will allow it to “move with certainty, speed and focus.” The New York-based private equity firm acquired the larger company formerly known as Walgreens Boots Alliance in a $10 billion deal announced in March.

Walgreens and other companies in the former alliance, such as United Kingdom-based Boots Group, are now operating as separate private firms with their own executives. Walgreens’ most recent CEO, Tim Wentworth, will remain with the company as a director.

July’s single-family homes under contract to be sold declined 0.4% from the prior month while rising a slight 0.7% from a year earlier as elevated mortgage rates kept many potential buyers on the sidelines, according to the National Association of Realtors. The trade group tracks the momentum of contract signings for sales that have not yet closed, based on data from large brokerages and multiple listing services.

“Even with modest improvements in mortgage rates, housing affordability and inventory, buyers still remain hesitant,” NAR Chief Economist Lawrence Yun said in a statement Thursday. “Buying a home is often the most expensive purchase people will make in their lives.”

The news came as government-backed lending agency Freddie Mac’s latest lender survey found 30-year, fixed-rate mortgages averaging 6.56% for the week ended Aug. 28, down from the prior week’s 6.58% but higher than the year-earlier average of 6.35%. The Mortgage Bankers Association said mortgage application volume for the week ended Aug. 22 declined 0.5% from the prior week, as refinancings dropped 4% while new-purchase filings rose 2%.