BEA revises US economic growth upwards to 4.2%

<p>New figures show the US economy grew at an annual rate of 4.2 per cent in Q2 2014.</p>

The US economy grew at an annual rate of 4.2 per cent in the second quarter of 2014, according to new figures published today (August 28th). The Bureau of Economic Analysis (BEA) released its second estimate of real gross domestic product for April, May and June of this year.

The revision is up from BEA’s four per cent advance estimate released last month, reflecting growing personal consumption, private inventory investment, exports, both residential and nonresidential fixed investment, as well as local government spending. 

The revision was largely due to a larger than previously estimated increase in nonresidential fixed investment, Forbes reported BEA as saying in a release. The US economy has rebounded strongly after contracting at an annual rate of 2.1 per cent in the first quarter.

However, these results were blamed on harsh winter weather which discouraged shoppers and hampered manufacturing.

A separate report from the US Labor Department showed the number of people applying for unemployment benefits fell by 1,000 to 298,000 last week. This new report comes after a series of positive US data published at the beginning of the week that has taken Wall Street indexes to records gains.

The Standard & Poor’s 500 Index closed above 2,000 for the first time at the beginning of the week. There are signs of tensions easing in Ukraine, the Middle East and Iraq and investors bet that stimulus will revive the world's economy. 

They are also hoping that central banks will keep the cost of borrowing low to boost global economic growth, with US Federal Reserve chairwoman Janet Yellen signalling last week that she was in no rush to raise rates.

Wall Street's record gains were also sparked by the fact that consumer confidence hit its highest level since 2007 in August, while durable goods orders posted record profits this summer.

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