The U.S. economy looks much more vigorous in the second quarter than previously thought, as a report released today (Aug. 27) showed businesses got off the sidelines and spent some money.
The acceleration in business investment, if it’s sustained, could add to the economy’s momentum in the months ahead. The data show why the Federal Reserve is considering hiking interest rates at its next meeting in September.
The U.S. economy grew at a faster 3.7% annual pace in the second quarter, up from the initial estimate of growth at a 2.3% clip, the Commerce Department said.
Economists polled by MarketWatch forecast gross domestic product would be revised up to 3.3%, but business investment was stronger than expected. The government estimated last month that gross domestic product expanded at a seasonally adjusted 2.3% clip from April to June.
Consumer spending, the main driver of U.S. economic activity, led the way as usual. Outlays were revised up to 3.1% from 2.9% in the second quarter after a tepid 1.8% gain in the first three months of the year.
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