Economy Grew at Best Six-Month Stretch in 10 Years in Second Half of 2013
WASHINGTON—The U.S. economy surged in the second quarter, more than offsetting a first-quarter contraction and putting growth back on an upward trajectory in 2014.
Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a seasonally adjusted annual rate of 4.0% in the second quarter, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had forecast growth at a 3.0% pace for the quarter.
An upturn in inventory building by businesses and an acceleration in consumer spending led the broad gains and offset a larger drag from increased imports.
The solid improvement comes on the heels of a first quarter when the economy shrank at a 2.1% pace. While still the worst quarter of the recovery that began in mid-2009, the first-quarter figure reflects an upward revision from a previously estimated 2.9% contraction.
Over the past year, the economy grew 2.4%—slightly ahead of the 2.3% average annual gain from recovery's start until the end of 2013, before an unusually cold winter socked the economy.
The first quarter "was an anomaly and growth will be much stronger through the rest of this year," said PNC Financial Services Group economist Stuart Hoffman. "Consumers are spending thanks to job and income gains, and with borrowing costs still low businesses are investing to meet stronger demand."
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