US GDP: Economy Grows Faster Than Expected
The US economy grew at an annual rate of 2.5% in the second quarter, much faster than was expected.
The sharp revision was seen as a result of more exports from the country, while it also imported less.
It is more than double the 1.1% growth rate in the first quarter and significantly higher than the Commerce Department's 1.7% estimate for the period.
The department also said the trade deficit improved, helping to offset weaker government spending.
Many economists expect growth to stay at 2.5% in the second half of the year, helped by steady job gains and less drag from federal spending cuts.
However, there has been concerns that increases in interest rates could slow the economy's momentum.
Meanwhile inflation between April and June remained at 0.3%.
Excluding food and energy costs, the price index for the same quarter gained 0.9%, which was slower in comparison to the first quarter's 1.4% increase.
Two key areas of the economy - housing and business investment - remained strong in the revision to second-quarter growth.
Housing construction grew at an annual rate of 12.9%, the fourth consecutive quarter of double-digit growth.
Business investment on structures was revised up to at 16.1% rate, although spending on equipment was revised a bit lower.
Consumer spending, which accounts for 70% of economic activity, grew by a 1.8% rate in the second quarter.
That was unchanged from the initial estimate but down from a 2.3% growth rate in the first quarter.
The number of Americans seeking unemployment benefits also continues to decline.
The Labor Department said that weekly applications for benefits fell 6,000 to a seasonally adjusted 331,000.
Economists pay closer to the four-week average because it's less volatile - the number nudged up 750 to 331,250, but it hit a 5.5-year low the previous week.
The latest economic figures come amid fears for coming harvests in the US.
A growing season that began unusually wet and cold in the Midwest is finishing hot and dry, renewing worries of drought and its impact on crops.
Experts say corn and soybeans may not have enough moisture in dry areas to develop to full weight, which could reduce this year's harvest - pushing up prices for a wide range of foodstuffs.