The U.S. economy expanded the most in 2 ½ years in the April-June quarter as all economic sectors registered increased output, its strongest gain since the final quarter of 2011.
The gross domestic output for the world’s largest economy rose by a revised 4.6 percent in the second quarter, up from the previously reported 4.2 percent growth. The upsurge in economic growth has led traders to speculate the Federal Reserve may increase interest rates early next year.
“It increases our confidence that strong growth is obtainable in the second half of this year,” Chris Rupkey, a New York-based chief financial economist at MUFG Union Bank, told Reuters.
The upward revision of the economic growth rate was attributed to stronger export growth and business spending than earlier calculated. Growth in consumer spending, which accounts for 70 percent of U.S. economic activity, remained unchanged at 2.5 percent. Stronger growth in the healthcare sector was dragged by lower expenditure on durable goods, entertainment and other services.
U.S. companies stocked inventory valued at $84.8 billion in the three months to June, adding 1.42 percentage points to economic growth.
The report indicates the U.S. economy has recovered strongly after the extreme winter weather caused the economy to contract 2.1 percent in the first quarter. Data released today showed consumer confidence rose to its highest level in September, potentially signaling an increase in household spending in the coming months.
Meanwhile, Argentina’s economic activity gauge remained steady in July, date released Friday showed. The index advanced 0.1 percent in July, according to data released by the INDEC statistics agency. Economists surveyed by Reuters had expected the gauge to decline 0.3 percent. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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