The United States economy performed better than expected in the second quarter as the nation’s gross domestic product grew at an annual rate of 4.2 percent, compared to the initial four percent the Department of Commerce reported recently. Economists forecasted the revision to be 3.9 percent.
The strong economic output can be attributed to stronger business investment of 8.4 percent, an increase from the initial 5.5 percent, and equipment spending jumped 10.7 percent. Exports, meanwhile, gained a 10.1 percent boost, up from the first estimate of 9.5 percent.
One element of the data is surprising some economists: the fact that businesses have refrained from stockpiling their products as they grew at a slower rate. According to the report, replenishment of inventories grew only 1.39 percent, slightly down from the initial 1.66 percent.
The Bureau of Economic Analysis (BEA) reported that the price index for gross domestic purchases, a measurement of prices paid by U.S. residents, rose 1.9 percent. Real personal consumption expenditures grew 2.5 percent.
Local and state government spending were also considerable factors to the data.
Despite the optimistic report, theDow Jones fell 100 points in the Thursday morning trading session amid concerns over Ukraine. The S&P 500, which has been enjoying a nice ride this year, is down nearly 10 points and the Nasdaq has dropped close to 20 points.
The first quarter experienced a considerable drawback as the economy shrank by two percent. Many economists and financial experts cited the unbearable weather conditions as the reason for the decline in economic output, which particularly affected housing and retail.
The Congressional Budget Office (CBO) released a report Wednesday that states the economy will likely continue the upward trend of 3.4 percent between 2014 and 2016.
It is projected that the overall growth rate for the U.S. economy this year will be two percent.
