The U.S. economy expanded more than previously estimated in the second quarter, reflecting an improvement in the trade deficit and a pickup in household spending on utilities, Bloomberg reported.
Gross domestic product (GDP) climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent, according to revised Commerce Department figures. The revised figure followed a 2 percent first-quarter pace and matched the median estimate of analysts surveyed by Bloomberg. The revised data also showed companies invested in new equipment at the weakest pace in almost three years.
A second straight quarter of slowing growth shows the U.S. economy is having difficulty making headway as consumers stay frugal and looming tax changes prompt companies to limit investment and hiring. Federal Reserve Chairman Ben Bernanke this week may reaffirm the view of many Federal Reserve policymakers that more stimulus will be needed unless the expansion shows signs of strengthening.
"We are very much stuck in a slow-growth mode," said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, N.C., who correctly forecast the revision. "We still don't see the economy breaking free of this 1.5 percent to 2 percent growth rate. A 1.7 percent pace is the personification of the Fed's frustration."
Second quarter growth forecasts from the 80 economists surveyed ranged from 1.2 percent to 2.2 percent. The economy expanded 4.1 percent in the fourth quarter.