US revises up GDP growth to 3.7 per cent
Economy grows faster than expected in second quarter on solid domestic demand
The US economy grew faster than initially thought in the second quarter on solid domestic demand, showing fairly strong momentum that could still allow the Federal Reserve to raise interest rates this year.
Gross domestic product expanded at a 3.7 per cent annual pace instead of the 2.3 per cent rate reported last month, the Department of Commerce said on Thursday in its second GDP estimate.
The GDP report, which was released in the wake of a global stock market sell-off, should assure investors and cautious Fed officials that the United States was in good shape to weather the growing strains in the world economy.
Concerns over slowing economic growth in China sent global equity markets into a tailspin last week, raising doubts that the US central bank would raise its short-term interest rate next month.
On Wednesday, New York Fed president William Dudley said that prospects of a September lift-off in the central bank's key lending rate "seems less compelling to me than it was a few weeks ago".
Prices for US government debt fell after the GDP data, while US stock index futures held on to gains. The dollar was stronger against a basket of currencies.