US Economy Shows Fastest Growth For More Than Two Years

The US economy grew at an annual rate of 4.6% in the second quarter – the fastest pace in about two-and-a-half years – compared to the previous estimate of 4.2%, according to revised figures.

The US Department of Commerce said the revision was primarily due to higher exports and business investments.

While exports increased by 11.1% from the previous three months, business spending rose by 9.7%, according to official data.

The country has experienced a steady decline in unemployment figures, and the improving job market is expected to strengthen consumer spending further.

Growth in consumer spending, a key growth driver in the US accounting for more than two-thirds of economic activity, was 2.5% – the same as the previous estimate.

The rebound in the economy comes after a 2.1% contraction in the first quarter due to severe winter weather.

The GDP grew 2.6% in the four quarters ending in June on a year-over-year basis.

Analysts noted that the robust growth in the country reflects the strength of the economy, which is expected to sustain the growth in the coming quarters.

"Economic growth has become perkier despite the first quarter contraction, as growth has been between 3.5% and 4.5% for three of the prior four quarters," Ward McCarthy from Jefferies & Co said in a note.

"Third quarter appears to be on track to growth between 3% and 3.5%. However, inflation remains very tame and has not been able to sustain any significant acceleration for more than a handful of months.

"The data signals an even stronger rebound from the decline seen in the first quarter, when extreme weather battered many parts of the economy," said Chris Williamson at Markit Economics.

"However, the impressive gain in the second quarter looks to be far more than just a weather-related upturn, with evidence pointing to an underlying buoyant pace of economic expansion. Survey data in particular indicate that strong growth has persisted throughout the third quarter."