US Economy Bounces Back After Harsh Winter
The US economy bounced back this spring after enduring a winter of discontent, the latest GDP figures have revealed.
In the quarter between April and June, GDP grew at an annual rate of 4% as the economy saw an increase in consumer and business spending.
The Commerce Department said the rebound came after a crippling 2.1% drop between January and March.
Despite being revised up from a previous estimate of a 2.9% fall for the quarter, the winter period still saw the biggest contraction since early 2009.
On top of higher consumer and businesses spending, the housing industry is also said to have boosted the economy in the last quarter.
The strong growth is welcome news following the dismal start to the year and reinforces some views that the US economy is gaining momentum which will continue into the second half.
Some analysts have predicted that the back half of the year will see an annual growth rate of around 3%.
The latest GDP figure is the best since the period between July and September last year, when it saw an increase of 4.5%.
Mark Zandi, chief economist at Moody's Analytics, believes growth could accelerate to above 4% in 2015.
He said: "I think we are finally going to start seeing more wage growth and that should kick the economy into high gear by late 2015."
It comes as many economists have been predicting that the Federal Reserve is likely to wait until mid-2015 to start raising interest rates.
But on news of the latest growth, Paul Ashworth, chief US economist at Capital Economics, said he expects the Federal Reserve will now be inclined to start raising rates early next year.