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.
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%.
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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.
"It will take more than one quarter of growth exceeding 3% to conclude that a stronger growth trajectory can be sustained, particularly in the absence of any meaningful fiscal stimulus as the [Federal Reserve] continues to gradually withdraw monetary support," Jim Baird of Plante Moran Financial Advisors said in a note to clients. "There's nothing in today's report that moves the needle in terms of the big picture."
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.
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.
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(END) Dow Jones Newswires
September 28, 2017 10:42 ET (14:42 GMT)