Second-Quarter GDP Growth Revised Upward

The economy performed slightly better than expected during the second quarter, according to a second estimate released Thursday by the Commerce Department.

The Bureau of Economic Analysis (BEA) reported that gross domestic product (GDP) grew last quarter at an annualized rate of 4.2 percent, a little bit better than the 4.0 percent growth originally recorded in last month's initial estimate.

Economists had expected no change from the first report.

With its latest estimate, BEA said the overall picture of the economy was about the same as in the first report, with the biggest differences being in nonresidential fixed investment (which increased more than previously thought) and private inventory investment (which was up slightly less).

The second-quarter growth estimates follow a poor final reading for the first quarter, which saw GDP drop 2.1 as poor weather and a slumping economy weighed the country down.

The sudden upturn for the second quarter reflects better numbers in exports, private inventory investment, state and local government spending, consumer spending, and both residential and nonresidential fixed investment, the government reported.

Though unsurprised by Thursday's report, economists said it comes as a positive sign.

"Today's report does not significantly alter our view of U.S. economic growth, which already called for a sustained acceleration from the Q1 malaise," said Michael Dolega, senior economist at TD Bank. "However, the details offer confirmation that the acceleration remains on a solid footing."

The third estimate for GDP growth is scheduled for release September 26.