Second-quarter growth revised up to 4.2 percent on software, trade

GDP climbed at a 4.2 percent annualized rate

People stream into the Apple store on 5th Avenue on Black Friday in New York November 28, 2014. REUTERS/Carlo Allegri/File Photo

The U.S. economy expanded in the second quarter at a slightly faster pace than previously estimated on revisions to imports and software spending, bolstering the strongest period of growth since 2014, according to Commerce Department data released Wednesday.

Gross domestic product grew at a 4.2 percent annualized rate — estimated at 4 percent and revised from 4.1 percent.

Consumer spending, the biggest part of the economy, grew 3.8 percent, which is estimated at 3.9 percent and revised from 4 percent. That reflects downward revisions in motor vehicles, nondurable goods, health care spending.

The revisions to GDP — the value of all goods and services produced in the United States — offer President Donald Trump another chance to stake his claim to the pickup in growth, as he did following the initial GDP report a month earlier.

Trump had called the numbers “amazing” and “very sustainable,” declaring his policies, including the biggest tax changes since the Reagan era, a success.

Even so, the pace of expansion is expected to cool from the second quarter as the tax-cut boost fades, a trade war threatens business demand and the Federal Reserve raises interest rates further.

Economists surveyed by Bloomberg project a 2.9 percent expansion for the full year.

Household purchases, which account for about 70 percent of the economy, have been supported by a strong job market and lower taxes. In addition, a rise in gasoline costs earlier this year has eased, reducing a risk to spending.

The continuing acceleration in profit growth suggests corporate America is benefiting from strength in consumer and business demand.

That, together with lower taxes, could bode well for further gains in investment this year, though after-tax profit growth cooled from the first quarter, when the cuts took effect.

Price data in the GDP report showed inflation was in line with the Fed’s 2 percent goal. Excluding food and energy, the central bank’s preferred price index that’s tied to personal spending rose at a 2 percent annualized rate, the same as in the initial report.