The world’s largest economy expanded at a 4 per cent pace in the second quarter of the year, the Commerce Department said on Wednesday. Economists had predicted 3 per cent.
It was the best showing for the US economy since the third quarter of last year and a reverse of the contraction the economy had in the first three months.
In another encouraging note, the depth of the first-quarter’s contraction was scaled back to 2.1 per cent from 2.9 per cent.
Higher consumer spending and more aggressive inventory building by companies contributed to a quarter that confirms the first three months of the year were anomalous.
The quickening in growth across the wider economy also sits more easily with the improvement America’s labour market has shown this year.
Monthly job growth quickened to 231,000 in the first half of the year from 185,000 in the final six months of 2013.
That improvement in the labour market was reflected in the household spending in the second quarter which accelerated to 2.5 per cent from 1.2 per cent in the first.
The weak first quarter for the economy forced economists at the Federal Reserve - and everywhere else - to scale back forecasts that 2014 would be the first year since the financial crisis that the US would clock growth of 3 per cent since.
