US second quarter growth revised upwards

<p>The economy grew by 3.7 per cent in Q2. </p>

The US economy grew significantly more than first estimated in the second quarter of the year, new data reveals. It expanded at an annual rate of 3.7 per cent, beating an initial report of 2.3 per cent on July 30th, the country’s Commerce Department has revealed.

The upward revision was mainly due to higher investment, government spending, and consumer spending than was previously reported. Exports also fared better, and inventories were higher than the Commerce Department had initially estimated.

Analysts said the revision would reassured investors after a week of turmoil on markets due to fears that the Chinese economy is slowing.

The revised figures may strengthen the case for a September interest rate hike, despite New York US Federal Reserve president William Dudley saying on Wednesday (August 26th) that a rate rise in September "now seems less compelling" than it was in July.

"The slowdown in China could lead… to a slower global growth rate and less demand for the US economy," he said.

However, he didn't completely dismiss a September rate rise, saying the case "could become more compelling by the time of the meeting as we get additional information on how the US economy is performing."

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