The U.S. government revised its second-quarter economic growth rate upwards on Thursday, beating analyst expectations and reflecting stronger consumer spending than earlier estimated.
Gross domestic product increased at an annual rate of 3.8% in the April to June period, up from the 3.3% previously estimated, said the Department of Commerce.
It marks the fastest quarterly growth rate in nearly two years, and analysts had originally forecast no change to Thursday's figure.
"Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting an upward revision to consumer spending," said the department's Bureau of Economic Analysis in the report.
This was the second such revision for the quarterly figure.
"The revision to consumer spending were isolated to services as it was up 2.6% at an annualized rate, compared with the 1.2% gain in the government's second estimate of second-quarter GDP," said Ryan Sweet, chief U.S. economist at Oxford Economics.
The figure for retail sales to private domestic buyers -- the engine of the economy -- was revised up slightly.
"This is unlikely going to move the needle on monetary policy as it's backward-looking and the Federal Reserve is focused on the health and risks to the labor market," Sweet said in a note.
He added that economists have to wait for further detailed data to gauge if the trajectory is "materially better" for the third quarter.
Besides an uptick in consumption, GDP growth in the second quarter this year mainly reflected a drop in imports as well -- these are a subtraction in GDP calculations.
While businesses moved to stock up on inventory early this year in anticipation of President Donald Trump's sweeping tariffs, the rush to do so eased somewhat in the second quarter.
The Commerce Department's latest report also said that real GDP dropped by 0.6% in the first quarter this year.
The figure was revised downwards by 0.1 percentage point on lower than estimated investment, government spending and exports.
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