The U.S. economy experienced a sharp turnaround from the first quarter to the second, fueling hopes of a rebound as the rest of the year plays out.
Real gross domestic product (GDP) increased at an annual rate of 4.0 percent in the second quarter of the year, according to an advance estimate released by the Commerce Department. Growth came in at the high end of a survey of economists, with the consensus forecast calling for an increase of 3.1 percent.
GDP for the first quarter was also revised to reflect a 2.1 percent drop, a modest improvement over the estimated 2.9 percent contraction reported previously.
The Commerce Department reported that the upturn over the latest quarter mostly reflected gains in private investment and exports as well as growing consumer spending. Increases in state and local government spending also contributed, as did improvements in both residential and nonresidential fixed investment.
Acknowledging that part of the second-quarter growth is due to a rebound from a weather-weakened first quarter, Doug Handler, chief economist for IHS, said that recent trends point to better than average economic growth of 3.0–3.5 percent for the second half of this year as the labor market keeps expanding.
"The data are consistent with an economy that can add 200,000-plus jobs per month for at least the next several months," Handler said.
The next employment situation report is due from the Bureau of Labor Statistics on Friday. Economists anticipate 233,000 jobs were added to payrolls in July, which would mark six straight months of growth above 200,000.
The government's second estimate for Q2 GDP, which will offer a more complete look at data, is scheduled for release August 28.