U.S. economic growth accelerated in the second quarter as a pickup in consumer spending offset the drag from soft business spending on equipment, suggesting a steady momentum that could bring the Federal Reserve closer to hiking interest rates this year.
Gross domestic product expanded at a 2.3% annual rate, the Commerce Department said on Thursday. First-quarter GDP, previously reported to have shrunk at a 0.2% pace, was revised up to show it rising at a 0.6% rate.
The revision to first-quarter growth reflected steps taken by the government to refine the seasonal adjustment for some components of GDP, which economists said left residual seasonality in the data, as well as new source data.
The Fed on Wednesday described the economy as expanding "moderately" while upgrading its view of the labour market and saying housing had shown "additional" improvement. The Fed's assessment left the door open for a possible hike in interest rates in September, which would be the first rise since 2006.
