WASHINGTON—The Commerce Department estimates that the U.S. economy grew 3% in the second quarter — the fastest growth pace in more than two years — up from its initial estimate of 2.6%.
NAFCU Chief Economist and Vice President of Research Curt Long attributed the positive revision to higher consumer spending and business investment estimates.
The Bureau of Economic Analysis released the second estimate this week.
Long noted that increased estimates for consumer spending and business investment were moderately offset by a decreased estimate for government spending. Residential investments also reduced growth by about a quarter of a percent in the second quarter.
"Consumer spending continues to boost the economy as the labor market tightens," Long said. "The only sizable drag came from residential investment as housing starts slowed during the quarter. However, construction is expected to improve in the second half of the year."
While it's unlikely the Fed will approve a rate hike in 2017 as core personal consumption expenditure inflation saw its slowest increase since the first quarter of 2015, Long is optimistic about the economy's growth.
"Looking ahead, the economy is expected to sustain its momentum in the coming months. The Federal Reserve of Atlanta currently expects GDP to grow 3.4% in the third quarter," Long said.