The United States actually experienced a strong 3.7% growth rate in the second quarter this year, according to a Commerce Department revision announced Thursday.
Growth had previously been estimated at 2.3%, positive but not as robust as many would like. The first quarter only saw growth of 0.6%, a figure that has not been revised since being announced earlier this year.
Second-quarter growth was driven by higher-than-expected consumer and government spending, as well as increased exports.
Commerce Secretary Penny Pritzker said that the revision “demonstrates sustained economic growth driven by consumer spending and business investment.”
Markets certainly liked the news, which boosted share prices on Wall Street for the second consecutive day after a tumultuous week. And after trading below $40, oil prices also saw a nearly 10% increase but were still below the $50 a barrel mark.
The Down Jones closed up 2.3%, or 366.72 points, while the major European indexes saw gains of over 3%.
In other good news, the Labor Department reported that unemployment claims dropped for the first time since July 18. Initial claims have held below 300,000 for almost six months as the unemployment rate has stabilized around 5.3%. That figure is normally considered relatively healthy – there are always some people who are between jobs, after all, so zero is impossible to reach – but still seems high given stagnant wages.
Those lagging wages, by the way, could be dragging down growth. As Eric Morath at the Wall Street Journal points out, the Commerce Department reported Gross Domestic Income as growing at only 0.6% in the second quarter. Unlike the Gross Domestic Product, or GDP, which grew by nearly 4% and measures spending (consumer and government spending, business investment), the GDI measures income derived from production (wages, taxes, profits).
In theory, GDP and GDI should be in sync given that they both intend to measure economic growth. The Bureau of Economic Analysis, the part of the Commerce Department that calculates and releases growth data, averaged the two in its revised report Thursday. That number was 2.1%, which may mean that economic growth is more moderate than either the GDI or GDP indicate on their own.