The newest revised estimate from the Commerce Department shows economic growth expanded even more than previously thought in the second quarter, reflecting a sharp turnaround from the year's opening months.
In its third estimate [1], the Bureau of Economic Analysis [2] (BEA) reported Friday that gross domestic product (GDP) increased at an annualized rate of 4.6 percent in the second quarter. The figure marks a step up from the bureau's last estimate of 4.2 percent growth, which in turn was up from an advance guess of 4.0 percent.
"With the third estimate for the second quarter, the general picture of economic growth remains the same," BEA said, adding, "[I]ncreases in nonresidential fixed investment and in exports were larger than previously estimated."
GDP in the first quarter declined at an annual rate of 2.1 percent, dragged down by winter storms and diminished consumer activity.
According to BEA, the turnaround in the second quarter largely reflected positive contributions from consumer spending, exports, private inventory investment, state and local government spending, and both residential and non-residential fixed investment.
The price index for gross domestic purchases, a measure of prices paid by U.S. consumers, rose 2.0 percent in the second quarter, just slightly above the government's second estimate and more than half a percentage point more than in the first quarter.
Doug Handler, chief U.S. economist for IHS Global Insight [3], said the new data leaves the "central story of the second quarter"Â unchanged.
"Economic growth remains on a sound footing, but the quarter's weather-driven rebound from an abnormally low first quarter overstates the extent of this growth," he said in a note.
Based on the latest numbers, the firm maintained its prediction of growth in the 3.0–3.5 percent range for the third and fourth quarters.