U.S. growth raised to 3.9% in second quarter, GDP report shows - MarketWatch

"The rebound in the second quarter after dismal 0.6% growth in the first three months of the year was driven largely by an increase in spending by consumers, who account for as much as 70% of U.S. economic activity.


Consumer purchases jumped 3.6%, up from a prior estimate of 3.1%. Americans spent more on services such as health care and transportation.

Businesses also invested more in structures such as office buildings and plants than the government initially reported.

Investment on structures, for instance, rose 6.2%, double the earlier estimate. Outlays on equipment also rose slightly instead of declining. And spending for home construction climbed 9.3% instead of 7.8%.

Most other figures in the revised GDP report were little changed. Exports rose 5.1% while imports edged up 3%. The value of inventories increased by $113.5 billion. And Inflation as measured by the PCE price index rose at a 2.2% annual rate.

Despite a livelier spring, economists expect growth to slow in the soon-to-end third quarter. The U.S. is likely to expand at a milder 2.5% pace from July through September, according to economists surveyed by MarketWatch. They point to weaker business spending and a strong dollar that continues to constrain U.S. exports.

Furthermore, an alternative measure of the economy called gross domestic income grew a meager 0.7% in the second quarter. The government says averaging GDI and GDP together results in 2.3% growth.

A newfound concern is an economic slowdown in China that’s rattled stock markets all around the world, a threat scary enough to prompt the Federal Reserve to delay a long-expected increase in a key U.S. interest rate."



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