Second Quarter GDP Upwardly Revised from 2.6% to 3.0%

US economic growth in the second quarter was stronger than originally reported, reaching President Donald Trump's target amid robust consumer spending and business investment.

The gross domestic product, the broadest measure of economic health, grew at an annual rate of 3 per cent in the April-June quarter, the Commerce Department reported Wednesday.

This came in much higher than the 185,000 forecast by analysts, and upped the ante on expectations for Friday's report, where forecasts now sit at 180,000 - which is close to the average monthly increase this year.

"The consumer is in the driver's seat in terms of economic growth", said Scott Anderson, chief economist at Bank of the West in San Francisco.

A year ago the economy grew a meagre 1.5%, the poorest showing since 2009 when GDP shrank by 2.9%. The growth rate in the January-March quarter was a lacklustre 1.2 per cent.

The budget the president released in May projects GDP growth will rise to 3 per cent over the next four years and remain at that level for the rest of the decade.

"We're still in the slow-lane economy", said Stuart Hoffman, senior economic adviser at PNC Financial Services Group.

Economists are also estimating how Hurricane Harvey could affect third-quarter growth. "All of those things weighed on USA growth". This is not far from the 2.1 percent average growth rate seen since the Great Recession, but I continue to believe that there is upward potential in the forecast, especially for 2018, if pro-growth policies are enacted. The only major component to be downwardly revised was government that dropped 0.3 percent as federal spending gave less lift while state and local spending was more of a drag, noted TD Economics in a research report.

The Trump administration has pledged to return the world's largest economy to sustained annual growth of three percent or more by slashing taxes and regulations while boosting trade.

Spending was revised to 3.3% from 2.8%, and consumers account for two-thirds of GDP.

Real gross domestic income (GDI) growth for the second quarter came in at 2.9%.

Corporate profits (after IVA and CCA) increased by $26.8bn (1.3%) in the second quarter after a decrease of $46.2bn (2.1%) in the first quarter.

Nonresidential fixed investment rose 6.9 per cent, up from an initial estimate of 5.2 per cent. Outlays on intellectual property products, structures and equipment were revised upward.

Imports, which are a subtraction in the calculation of GDP, increased.