The Bureau of Economic Analysis raised its estimate of second-quarter growth in the gross domestic product from 1.7 percent to 2.5 percent on Thursday morning, a steeper improvement than analysts had expected.
The BEA reported that economic growth picked up from 1.1 percent annually in the first quarter thanks to an increase in exports and smaller-than-expected cutbacks in government spending.
Gross domestic product is a measure of growth calculated by adding all the sales of final goods in services in the economy. The BEA also published an initial estimate of a separate measure based on incomes rather than sales Thursday morning. That statistic, gross domestic income, also showed the economy growing at a 2.5 percent annual rate in the second quarter.
Uncorrected for inflation, GDP grew 3.2 percent to a total $16.7 trillion.
Thursday’s report shows that the tepid recovery remains more resilient than initially thought, based on advanced estimates of GDP. But with first-quarter growth at an annualized rate of 1.1 percent and second-quarter growth at 2.5 percent, it would take quick pick-up growth in the second half of the year to match 2012 GDP growth of 2.8 percent. Government and business economists expect the economy to continue expanding in upcoming months.
Officials at the Federal Reserve are watching economic data closely heading into their September monetary policy meeting, minutes from their July meeting show. Although many investors anticipate that the Fed will begin winding down its $85 billion monthly bond-buying program next month, members of the Fed themselves have not fully committed to that timeline. It’s also possible that other factors, such as a looming fiscal showdown in Congress and likely U.S. military engagement in Syria, could disrupt the economy and lead the Fed to hold off on the taper.