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The U.S. economy grew at a seasonally adjusted annual rate of 2.1% in the second quarter, the Bureau of Economic Analysis reported this morning. Economists surveyed by had projected that year over year growth in GDP would fall to 1.8%. So today’s number is stronger than expected but still very much weaker than first quarter annualized growth of 3.1%.

That leaves the economy chugging along with enough momentum to diminish fears of a near-term recession, but showing enough weakness to leave the Federal Reserve on track to cut interest rates at its July 31 meeting. The CME Fed Watch Tool, which calculates the odds of a move by the Federal Reserve by looking at prices in the Fed Funds Futures market, shows 100% odds of a cut by the Fed on July 31–as it did yesterday. The only shift in reaction to today’s GDP report is that the odds of a 50 basis point cut, instead of a more routine 25 basis point reduction in interest rates, climbed today to 21.4% from 18.8% yesterday.

Personal consumption expenditures, a measure that tracks consumer spending, increased by 4.3%. That was the second highest reading in the last 16 quarters. Consumer spending contributed 2.85 percentage points to the second quarter GDP growth of 2.1%.

Which offset the slip in business spending as fixed investment fell 0.8% after growing by 3.2% in the first quarter. Net exports were a drag on growth as well (no surprise there) subtracting 0.65 percentage points from growth.

On the news–added to some very strong earnings reports–the Standard & Poor’s 500 stock index climbed 0.74% at the close and the Dow Jones Industrial Average was ahead 0.19%. (The Dow includes a heavy weighting of global exporters so that index is particularly sensitive to shifts in export growth.) The NASDAQ Composite gained 1.11% on good earnings news from the technology sector. The Russell 2000 small cap index, which is not very sensitive to export growth or decline, was up 1.12%.

The yield on the 10-year Treasury dropped 1 basis point to 2.07%. The yield on the 2-year Treasury held steady at 1.86%.

U.S. crude benchmark West Texas Intermediate gained 0.3% to $56.19 a barrel. International benchmark Brent fell 0.09%.

Gold climbed 0.24% to $1417.99 an ounce. The Dollar Spot Index (DXY) gained 0.17%.