Mainenews reporter

Economy surged in Q2: Growth revised up to 3.7% from 2.3%

Economy surged in Q2: Growth revised up to 3.7% from 2.3%

The U.S. economy grew more rapidly than previously thought in the second quarter on stronger business stockpiling, commercial construction and consumer spending. The nation’s gross domestic product expanded at a seasonally adjusted annual rate of 3.7% in the April-June period, the Commerce Department said Thursday, above the 2.3% initially estimated. Economists surveyed by Bloomberg expected a revision to 3.2% growth.635605755604663179-AP-Economy-GDP

The surge was partly a rebound from meager 0.6% growth in a first quarter hampered by harsh winter weather and a West Coast ports slowdown. But in an encouraging sign, business investment increased a solid 4.1% and added significantly to growth in the quarter. The government previously thought business spending declined and was a drag on the economy. In recent months, a strong dollar and low oil prices have hurt U.S. exports and energy company investment but economists have anticipated a rebound.

The rising greenback also bolsters imports by making them cheaper for U.S. consumers, hampering economic growth. But imports rose 2.8%, less than the government initially estimated. Meanwhile, businesses aggressively replenished inventories, adding 0.2% to growth. The government previously thought companies pulled back on such stockpiling, reducing GDP growth. But their swelled inventories could mean products don’t have to be replaced as rapidly in coming months, curtailing growth later this year.

Consumer spending advanced 3.1%, slightly more than first estimated. Earlier reports showed retail sales increased smartly in the period as consumers benefited from reduced debt and solid job and income growth. And government spending rose 2.6% on stronger outlays by state and local governments, substantially more than previously thought.

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