US second-quarter growth revised upward
September 29, 2016
The US economy expanded in the April-June quarter at a slightly faster pace than previously estimated, the federal Bureau of Economic Analysis said Thursday.
Real growth stood at an annual rate of 1.4 percent in the second quarter, compared to the earlier estimate last month of 1.1 percent. The first estimate in July was an annualized 1.2 percent.
The upward GDP revision was based in part on stronger commercial fixed investment than shown by the initial data.
In releasing the new numbers, which were derived from a fuller set of data than that used in prior estimates, the US Commerce Department said the general picture of US growth in the quarter remained the same. "The most notable change from the second to third estimate is that nonresidential fixed investment increased in the second quarter," the department said in a statement, noting that in July's estimate it had decreased.
"The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures, exports and nonresidential fixed investment."
Monetary policy implications
The rate-setting US Federal Reserve, which is hinting at tightening monetary policy before the end of 2016, last week said that recent economic data showed that growth "has picked up from the modest pace seen in the first half of this year."
The health of the labor market and the pace of GDP growth are among the key factors considered by monetary policymakers while setting interest rates, which are at historically low levels.
The central bank last week left its near-record low benchmark interest rate unchanged.
Fed Chairwoman Janet Yellen said the lack of action "does not reflect a lack of confidence in the economy." Amid persistent, very low inflation and slowing job gains, the Fed's monetary-policy committee "chose to wait for further evidence of continued progress" toward its goals of full employment and longer-run inflation of around 2 per cent. The US unemployment rate was 4.9 percent in August.
sri/hg (AFP, dpa)