The U.S. economy expanded more than expected in the second quarter, according to the Commerce Department’s first revision.
Second-quarter GDP increased at a 4.2 percent annual rate, according to the Commerce Department, above the originally reported 4.1 percent annual rate.
Economists surveyed by The Wall Street Journal expected an unchanged reading of 4.1 percent on Wednesday.
Commenting on the latest figures, Mike Loewengart, vice president of investment strategy at E*Trade said, “Anything near 4.0 percent should be viewed favorably by the street, as it shows the continued power of our economic engine,” adding that, “some say we’re late in the business cycle, but clearly there’s more gas in the tank, at least for now.”
Key adjustments in the revision include consumer spending, which was strong, although a little less than previously estimated, with personal consumption expenditures rising 3.8 percent versus the previously reported 4 percent. Business investment was solid, with fixed nonresidential investment rising at an 8.5 percent annual clip versus the prior estimate of 7.3 percent.
Government spending increased 2.3 percent instead of 2.1 percent. This was mostly due to a rise in military spending.
Inflation inched higher, to a 1.9 percent annual pace versus the previous 1.8 percent.