By Jeffry Bartash
WASHINGTON (MarketWatch) - The U.S. economy grew at a 2.5% annual rate in the second quarter instead of 1.7% as previously estimated, largely because of an improved trade picture, the Commerce Department said Thursday. Economists polled by MarketWatch had expected gross domestic product to be revised up to 2.3%, mainly because of a smaller U.S. trade gap. Even faster growth in exports and a somewhat slower increase in imports largely accounted for the bump in GDP. Companies also restocked warehouse shelves a bit faster than previously believed. In another positive sign, underlying demand for U.S.-produced goods and services rose at a 1.9% pace in the second quarter instead of 1.3%, though that increase reflected higher exports. And businesses sharply boosted investment in structures. Most other aspects of the GDP report, however, were little changed. Consumer spending, the linchpin of the U.S. economy, was unchanged at 1.8% growth. Government spending fell 0.9% instead of 0.4%. Inflation as measured by the PCE index, meanwhile, was flat overall, and it rose just 0.8% excluding food and energy. Disposable personal income, or the money people have left over after taxes, climbed 3.2% instead of 3.4% as originally reported. The GDP report will be refined through one further update in the next month.
