Many economists had been forecasting growth in the current July-September quarter would be around 3%.
The US economy expanded at a rate of 3 percent in the second quarter of 2017, which is faster that has been predicted, the Department of Commerce said in a news release on Wednesday. The average of real GDP and real GDI, which is a supplemental measure of US economic activity that equally weights GDP and GDI, gained 3.0% in the 2Q, compared with an increase of 2.0% in the first.
The result is a healthy upward revision from the government's initial estimate of 2.6 per cent growth in the second quarter.
But inflation remained weak in the second quarter, with the Federal Reserve's preferred measure, the personal consumption expenditures price index excluding food and energy, increasing at a 0.9% rate as previously reported.
The U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years, and there are signs that the momentum was sustained at the start of the third quarter.
For the whole year, Zandi forecasts GDP will grow 2.1 percent. Payroll processor ADP said US employers added a seasonally adjusted 237,000 jobs in August, easily topping the Econoday consensus forecast for 185,000. However, the current devastation in Southeast Texas is likely to hit growth in the third quarter, with economic activity substantially disrupted in the Houston, Victoria, and Corpus Christi metro areas. Of the almost 200 countries whose economies are tracked by the International Monetary Fund, just seven saw real, inflation-adjusted gross domestic product rise by 7 percent or more past year. But he said 0.4 percentage point of that forecast reflects an assumption that the Trump administration will win a tax cut package that will take effect in early 2018 and the economy will also be boosted by higher spending on the military and infrastructure projects. Goods exports increased by 2.3 percent in the second quarter, with goods imports up by 1.6 percent.
Rest of the upward revision was connected to non-residential fixed investment that rose 6.9 percent from the initial estimate of 5.2 percent.
New figures show the USA economy expanded by 3% in the three months to the end of June, growing at its fastest pace in more than two years. "This raises doubts on the sustainability of the robust pace of consumer spending".
The US economic expansion gathered pace in the second quarter.