WASHINGTON—The Federal Reserve usually raises interest rates when inflation climbs over 2 percent. But Fed Chairman Jerome Powell announced Thursday that the central bank of the United States is changing that and will keep rates near zero even if inflation goes up, making household and business borrowing easier. Powell said the reduced interest has helped low- and moderate-income families during the coronavirus pandemic: “The robust job market was delivering life-changing gains for many individuals, families, and communities.”

The S&P 500 climbed to within 2 percent of its record high on Wednesday, giving Wall Street its fourth straight day in positive territory. Walt Disney Co. stocks spiked by more than 8 percent after the company announced expectation-beating profits and huge gains in its video-streaming service, Disney+. Experts suggest the growth could come from the perception that the coronavirus pandemic has had a less severe effect on corporations than expected.

Even though average personal income fell by 1 percent, consumer spending jumped by 5.6 percent in June, the U.S. Department of Commerce reported on Friday. The gross domestic product dropped last month, but reopening businesses and federal stimulus checks appeared to boost consumer confidence. June marked the second straight month of gains in spending after a plunge in March and April.

WASHINGTON—The U.S. Commerce Department on Thursday reported a 33 percent annualized drop in the gross domestic product in the second quarter of 2020. That’s triple any other quarterly economic loss since the department first released estimates in 1947. Last quarter became the second in a row with a GDP decrease after years of sustained growth.

While acknowledging the economy had rebounded since March and April, the Federal Reserve on Wednesday expressed concern that the coronavirus pandemic “will weigh heavily on economic activity, employment, and inflation.” The agency announced it will continue to buy $120 billion in Treasury and mortgage bonds each month, but what happens next will depend significantly on the course of the virus.

About 1.4 million Americans applied for unemployment benefits last week. The number, which just represents new jobless claims, rose for the first time in four months. But the total number of people receiving unemployment fell by 1.1 million to 16.2 million, according to the U.S. Labor Department’s Thursday report.

The average for a 30-year fixed-rate home mortgage fell to 2.9 percent this week, according to Freddie Mac on Thursday. That’s the first time in 50 years the rate has dropped below 3 percent. Homeowners refinanced more than double the number of home loans—2 million—between January and April than they did during the same period last year, according to CoreLogic, a real estate data company.