U.S. Second-Quarter Growth Strengthens
WASHINGTON (Reuters) - The U.S. economy rebounded more strongly than initially thought in the second quarter with a bigger chunk of the growth driven by domestic demand in a bright sign for the future.
Gross domestic product expanded at a 4.2 percent annual rate instead of the previously reported 4.0 percent pace, the Commerce Department said on Thursday.
Both business spending and exports were revised higher, while a buildup in business inventories was smaller than previously estimated - a mix of growth that provides a stronger underpinning for the remainder of the year.
Separate reports showing a second straight weekly decline in the number of Americans filing new claims for jobless benefits and a jump in home purchase contracts also suggested underlying momentum in the economy.
"The economy is in good shape and getting better," said Joel Naroff, chief economist at Naroff Economic Advisers in Holland, Pennsylvania.
While the economy shrank at a 2.1 percent rate in the first quarter, economists expect growth of around 2 percent for the year as a whole, with GDP expanding about 3 percent in 2015.
The dollar firmed against a basket of currencies on the data, but U.S. stocks were down as traders kept a wary eye on Ukraine, which accused Russian forces of entering the country. Prices for U.S. Treasury debt rose as the troubles in Ukraine triggered flight-to-safety bids.
One report on Thursday showed the number of Americans filing new applications for jobless aid slipped 1,000 to a seasonally adjusted 298,000 last week.
In a third report, the National Association of Realtors said its Pending Home Sales index, which leads home resales by a month or two, jumped 3.3 percent to an 11-month high in July. It was the latest sign the housing market recovery was back on track after faltering in the second half of 2013.
Growth in the second quarter was broad-based, with consumer and business spending, exports, homebuilding and even government contributing. Domestic demand rose at its fastest pace in four years, pointing to a recovery that was becoming more durable after the first-quarter's weather-induced slump.
Both business spending and exports were revised higher, while a buildup in business inventories was smaller than previously estimated - a mix of growth that provides a stronger underpinning for the remainder of the year.
Separate reports showing a second straight weekly decline in the number of Americans filing new claims for jobless benefits and a jump in home purchase contracts also suggested underlying momentum in the economy.
"The economy is in good shape and getting better," said Joel Naroff, chief economist at Naroff Economic Advisers in Holland, Pennsylvania.
While the economy shrank at a 2.1 percent rate in the first quarter, economists expect growth of around 2 percent for the year as a whole, with GDP expanding about 3 percent in 2015.
The dollar firmed against a basket of currencies on the data, but U.S. stocks were down as traders kept a wary eye on Ukraine, which accused Russian forces of entering the country. Prices for U.S. Treasury debt rose as the troubles in Ukraine triggered flight-to-safety bids.
One report on Thursday showed the number of Americans filing new applications for jobless aid slipped 1,000 to a seasonally adjusted 298,000 last week.
In a third report, the National Association of Realtors said its Pending Home Sales index, which leads home resales by a month or two, jumped 3.3 percent to an 11-month high in July. It was the latest sign the housing market recovery was back on track after faltering in the second half of 2013.
Growth in the second quarter was broad-based, with consumer and business spending, exports, homebuilding and even government contributing. Domestic demand rose at its fastest pace in four years, pointing to a recovery that was becoming more durable after the first-quarter's weather-induced slump.