WASHINGTON – U.S. economic output grew at a 3.1% annual rate in the second quarter, slightly stronger than previously thought and marking the best growth in two years.
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The estimate, based on revised data released by the Commerce Department on Thursday, replaces a previous tally of 3% growth. Economists surveyed by The Wall Street Journal had expected the estimate to remain 3%.
The agency said stronger business spending--mainly in the form of farmers decreasing their stockpiles less than previously thought--led to the upward revision.
The report did little to alter the picture of an economy that rebounded in the spring after a lackluster winter and then lost momentum in recent months after hurricanes tore into Texas and Florida.
Many private-sector economists estimate economic output fell back to a rate of between 1% and 2% in the third quarter. They expect growth to rebound in the year's final months and early next year as hurricane-hit communities rebuild, consumers and businesses step up spending broadly and the global economy gains traction.
The economy at its core remains stable, as steady job growth and a booming stock market encourage households to spend. Consumers, accounting for more than two-thirds of economic demand, increased spending at a 3.3% rate in the second quarter.
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Businesses also spent steadily. Nonresidential fixed investment--a measure of business spending on equipment, software and commercial space--grew at a 6.7% rate in the spring, slightly lower than previously thought but marking the second consecutive quarter of solid growth.
Exports grew at a 3.5% rate, a slightly downward revision and about half the prior quarter's rate. But the increase reflected a healthy development as stronger growth around the global boosts business at U.S. manufacturers.
Thursday's report also showed corporate profits were weaker than previously thought in the spring. After-tax profits, without inventory valuation and capital consumption adjustments, dropped 2% from the first quarter instead of the previously reported 1.4%. Profits were still 7.4% higher from a year earlier.
The Commerce Department's release on GDP can be found at: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
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(END) Dow Jones Newswires
September 28, 2017 08:45 ET (12:45 GMT)