30th July 2015
The US economy expanded by 2.3% on an annualised basis in the three months to the end of June according to official statistics.
The tally marks a strong turnaround for the world’s largest economy, which notched up just 0.6% growth in the first quarter of 2015.
The US Bureau of Economic Analysis urged however that the second-quarter advance estimate is based on source data that are incomplete and subject to further revision.
Notably the 0.6% growth rate for the first three months of 2015, was revised up from the previous estimate of a 0.2% contraction.
The next estimate for the second quarter, based on more complete data will be released on 27 August.
The Bureau said the increase during the three months to end of June reflected positive contributions from personal consumption expenditures, exports, state and local government spending, and residential fixed investment.
The total was partly offset by negative contributions from federal government spending, private inventory investment, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
Commenting on the new data, Steve Murphy, US economist at Capital Economics said: “Moving forward, we expect GDP growth to average close to 3% annualised in the second half of the year, due to a turnaround in mining and the fading impact of the dollar’s appreciation. This should provide a decent base for economic growth of around 2.8% next year and support the case for higher interest rates sooner rather than later. ”
Speaking to BBC News Chris Williamson, chief economist at research firm Markit added: “Updated GDP numbers deliver a double-punch to US economy doom-mongers, painting a reassuringly bright picture of the health of the US economy so far this year and raising the odds of the Fed hiking interest rates in September.”