U.S. GDP grew 4.6% in Q2, faster than previously estimated
Economic activity in the U.S. grew faster than previously estimated in the second quarter of 2014, according to a report released by the Commerce Department on Friday, with the upwardly revised growth matching economist estimates.
The Commerce Department said GDP increased by 4.6 percent in the second quarter compared to the previously reported 4.2 percent growth.
The upwardly revised growth, which matched economists' consensus estimate, reflects a notable turnaround from the 2.1 percent contraction seen in the first quarter.
The stronger than previously estimated growth was primarily due to upward revisions to non-residential fixed investment and exports.
Non-residential fixed investment jumped by a revised 9.7 percent during the quarter, while exports surged up by a revised 11.1 percent.
The report said consumer spending increased by an unrevised 2.5 percent, reflecting a notable acceleration from the 1.2 percent growth seen in the first quarter.
The Commerce Department said the turnaround from the previous quarter also reflected upturns in exports and private inventory investment as well as an acceleration in non-residential fixed investment.
With the upward revision, the GDP growth in the second quarter reflected the biggest jump since a matching increase in the fourth quarter of 2011.
However, Chris Low, chief economist at FTN Financial, noted that recent strength in GDP has typically been followed by a pullback.
"The economy has only reached a 4.5% growth rate three times in this expansion, and the second quarter of 2014 is one of the three," Low said. "In each case, the prior quarter's growth was less than 2% and growth weakened in ensuing quarters."
He added, "The Fed is optimistic the third time will be the charm, but we are skeptical as Q1 was the weakest quarter of the expansion to date. Growth in the first half, even with this revision, was just 1.25%."
The Commerce Department said its reading on core consumer prices, which exclude food and energy prices, rose by 2.0 percent in the second quarter compared to the 1.2 percent increase in the first quarter.