WASHINGTON — The U.S. economy posted a much bigger rebound in growth during the spring than previously reported, thanks to improvements in a number of areas including consumer spending and business investment.
The economy expanded at an annual rate of 3.7 percent in the April-June quarter, more than a percentage point greater than the 2.3 percent originally estimated, the Commerce Department reported Thursday.
It was the strongest growth since last summer and marked a sharp improvement from the anemic 0.6 percent advance during the January-March quarter when a harsh winter sapped activity.
Analysts believe growth has slowed a bit in the current quarter to around 2.5 percent. Some have expressed concern that shrinking global stock markets and a sharp slowdown in China will further weaken the economy in coming months.
The revision for second quarter growth reflected a boost in consumer spending, which grew at annual rate of 3.1 percent, up from a 1.8 percent growth rate in the first quarter.
Business investment in structures and equipment was revised higher to show growth of 3.2 percent, while housing construction was revised up to a gain of 7.8 percent.
Also fueling growth were strong gains in state and local government spending and business restocking of store shelves. The rise in inventories, however, could act as a drag in the current quarter if businesses cutback on ordering because of concerns they have too many unwanted goods.
See Friday's Arkansas Democrat-Gazette for full coverage.