US 2nd Quarter GDP Grows 3.9%, Powered By Consumer Spending

(RTTNews) - U.S. economic growth was revised higher for the April-to-June period, raising expectations that the Federal Reserve will soon raise interest rates.

Updated government data showed that the U.S. Gross Domestic Product expanded at a revised rate of 3.9 percent in the second quarter.

This was revised up from the 3.7 percent growth that was reported last month.

The second quarter saw a strong rebound after the first three months of the year, when the economy shrank by 0.2 percent.

Growth was fueled by higher consumer spending and increased business investment.

Americans were in the mood to shop after the cold, miserable winter. Consumer spending rose 3.6 percent compared to an earlier 3.1 percent estimate.

There were big revisions to some other metrics. For instance, business investment in structures was revised up to 6.2 percent from a 3.1 percent increase.

In a further sign that the housing market is on the mend, home construction rose at a 9.3 percent rate, not 7.8 percent.

This is the final revision to the second-quarter GDP figures.

Next month, the government will release its first estimate of economic growth for the third quarter.

Third quarter growth is shaping up to be far less robust.

The Atlanta Fed's GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.4 percent on September 24, down slightly from 1.5 percent on September 17.