WASHINGTON – After a bleak start to the year, the U.S. economy grew at a brisk annual rate of 4.2 percent in the April-June quarter, the government said Thursday, slightly faster than it had first estimated.
The upward revision supported expectations that the second half of 2014 will be far stronger than the first half.
The Commerce Department’s second estimate of growth for last quarter followed its initial estimate of 4 percent. The upward revision reflected stronger business investment than first thought.
The seasonally adjusted 4.2 percent annual growth rate for the gross domestic product – the nation’s total output of goods and services – came after the economy had shrunk at a 2.1 percent annual rate in the January-March quarter.
Many economists say they expect growth of around 3 percent in the current July-September quarter and for the rest of the year.
The government’s upwardly revised estimate of business investment last quarter showed capital spending growing at an annual rate of 8.4 percent last quarter. That was sharply higher than the government’s initial 5.5 percent estimate.
Because of the rocky start, economists think growth for all of 2014 will average just 2.1 percent, little changed from last year’s 2.2 percent increase.
They’re more optimistic about 2015. Many expect growth to accelerate to 3 percent, an indication that the economy is finally gaining cruising speed after the deep 2007-2009 recession, the worst since the 1930s.
Economists also foresee the unemployment rate, now a nearly normal 6.2 percent, going even lower.