The U.S. economy expanded at a better pace in the second quarter of this year, than was earlier estimated, ending up with the best quarterly GDP growth in more than two years. In its second estimate, the Department of Commerce upwardly revised economic growth for the second quarter. The report highlighted a strong increase in consumer spending and a rise in business investment. Given this performance, it is likely that the U.S. economy will register a steady growth pace even in the third quarter. With the domestic economy witnessing stable expansion, growth mutual funds have emerged as prudent investment options.

Q2 GDP Advanced in Second Estimate

In its second estimate, GDP increased from the previous estimate of 2.6% to 3%, marking the best growth pace since the first quarter of 2015. It also beat consensus estimate of 2.7% and improved from the first quarter’s pace of 1.2%. Moreover, corporate profits after tax increased 8.1% year over year in the second quarter of 2017, despite falling 1.4% from the first quarter of this year.

Additionally, both consumer spending and business investment gained traction in the second quarter. Consumer spending, which accounts for a bulk of U.S. economic output, was revised upward from the preliminary reading of 2.8% to 3.3% in the second estimate, registering its best increase in a year. Increase in spending on cell phones, motor vehicles, utilities and housing pushed up consumer spending for the quarter. Also, business investment rose 6.9% in the second quarter, registering strong performance for two consecutive quarters.

Further, favorable business spending and retail sales data have led most economists to predict that the U.S. economy will maintain a growth pace of more than 3% in the third quarter. Also, according to the ADP National Employment Report, private companies created 237,000 jobs in August, marking the best pace since March. Steady private payrolls data bode well for the labor market and eventually for the economy.

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