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... Gross domestic product increased at a 2.2% annualized rate, revised up from the previously estimated 1.5% pace, the Commerce Department's Bureau of Economic Analysis said in its third estimate of second-quarter GDP on Wednesday. Economists polled by Reuters had expected that GDP growth would be unrevised.
The economy grew at a 2.5% rate in the first quarter. That was revised up from the previously reported 2.1% pace.
The BEA revised GDP data going back to 2021 to reflect updated information. The growth numbers suggest the economy has so far held up in the face of headwinds from the US-Israeli war with Iran, thanks to businesses aggressively investing in AI and generous tax refunds from last year's tax legislation underpinning consumer spending.
Consumer spending, which accounts for more than two-thirds of the economy, grew at a 3.8% rate last quarter, revised up from the previously reported 3.4% pace. Spending grew at a 0.7% rate in January-March quarter.
But even as consumers continue to spend, household budgets are increasingly under strain from higher inflation, notably gasoline prices.
A survey from the Conference Board on Tuesday showed consumer confidence diving to a near 12-1/2-year low in September.
Despite the anxiety over inflation, the vigorous pace of consumer spending appears to have continued in the third quarter, thanks to an AI-driven stock market rally as well as households tapping their savings and saving less. Business spending on equipment maintained double-digit growth. ...
