US GDP grew more quickly than expected in Q2

The US economy accelerated slightly over the three months to June, boosted by a big jump in consumption and with the other details of the report painting a more balanced picture of activity during the period than initially thought.

Gross domestic product expanded at a 1.4% pace in quarterly annualised terms, revised data from the Department of Commerce revealed, up from the 0.8% clip seen over the previous three-month stretch.

That was slightly better than the 1.3% pace which the consensus had penciled-in and the 1.1% initially estimated by the Department of Commerce.

Household consumption sped ahead at a 4.3% clip, one tenth of a percentage point less than forecast by economists, but was nevertheless strong.

Investment in structures was revised sharply higher, with government statisticians now estimating that it shrank by 2.1%, instead of an initially estimated fall of 8.4%.

Growth in spending on intellectual property investments was also revised higher, from 8.6% to 9.0%.

The preliminary estimate of the drag from inventory accumulation was also revised lower.

Department of Commerce statisticians had initially estimated that it subtracted 1.3 percentage points from the quarterly rate of growth in GDP, versus -1.2% in its latest estimate.

Public consumption and investment fell at a 1.7% clip, down from the 1.5% calculated in its prior estimate.

Net exports added two tenths of a percentage point to the rate of growth in GDP, up from a prior estimate of 0.1%.

Following the data, Blerina Uruci at Barclays Research reiterated her forecast for GDP growth of 2.5% in the third quarter.

"The upward revision to second-quarter GDP was principally because business investment and exports were a big stronger than previously believed, which is at least encouraging," was the verdict from Paul Ashworth, chief US economist at Capital Economics.