The US economy expanded at an annualised rate of 2.5 per cent in the second quarter according to revised estimates from the Commerce Department.
At 2.5 per cent, the speed of growth was more than double the speed during the first three months of the year and significantly above the original estimate of 1.7 per cent.
Recent data showed that exports climbed 8.6 per cent, above the initial forecast of 5.4 per cent in the second quarter, their fastest pace in over two years, further bolstering support that the US economy is recovering well.
The upward revision should give Federal Reserve officials more confidence that the recovery is gathering steam as the fiscal drag begins to fade.
Capital Economics chief US economist Paul Ashworth says: “Under those circumstances we still think the Fed will begin tapering its monthly asset purchases in September, particularly with weekly initial jobless claims, which fell back to 331,000 last week, pointing to a further gradual improvement in the labour market.”
“That said, it is no certainty and August’s non-farm payroll figures will be watched closely.”