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U.S. economic growth in second quarter revised up to 1.4 percent

Xinhua, September 29, 2016 Adjust font size:

U.S. economy expanded at a faster pace than previously reported in the second quarter of this year, driven by stronger consumer spending, according to the third estimate released by the Commerce Department on Thursday.

The real gross domestic product (GDP) in the United States increased at an annual rate of 1.4 percent in the second quarter this year, slightly higher than the second estimate of 1.1 percent. In the first quarter, the economy expanded at 0.8 percent.

"The acceleration in real GDP in the second quarter primarily reflected an acceleration in PCE (personal consumption expenditure), and upturns in nonresidential fixed investment and in exports," the Commerce Department said.

Consumer spending grew strongly at 4.3 percent in the second quarter, its second-fastest quarterly growth since 2006, and contributed 2.88 percentage points to the GDP growth in the quarter.

Net exports and business fixed investment, which had subtracted GDP growth, began to have positive contributions to the economic growth.

Net exports contributed 0.18 percentage point to the GDP growth in the second quarter, compared to nearly zero contribution in the first quarter.

Nonresidential investment increased 1 percent in the second quarter, and contributed 0.12 percentage point to the economic growth, while it subtracted 0.44 percentage point from the growth in the first quarter.

The PCE price index, a Federal Reserve preferred inflation indicator, increased 2 percent in the second quarter, compared to 0.3 percent growth in the first quarter.

Federal Reserve Chairwoman Janet Yellen said on Wednesday that most of her colleagues see it appropriate to raise interest rate this year if the economy continues on current path.

The U.S. Fed kept the interest rate unchanged last week and said it will need more evidence that the inflation and job market continue to improve before raising rates. Market investors now widely expected the central bank would move the rate up in December. Endi