The US economy grew faster than initially thought in the second quarter amid strong consumer spending, while corporate profits rebounded, which should help to sustain the expansion. 

Gross domestic product (GDP) increased at a 3.0 per cent annualised rate last quarter, the Commerce Department’s Bureau of Economic Analysis said in its second estimate of second-quarter GDP estimates. This is an upward revision from the 2.8 per cent rate reported last month.

The economy grew at a 1.4 per cent pace in the first quarter. Consumer spending, which accounts for more than two-thirds of the economy, increased at an upwardly revised 2.9 per cent rate. 

It was previously reported to have grown at a 2.3 per cent pace. This offset downgrades in business investment, exports, and private inventory investment. Spending is being supported in part by wage gains, but momentum is slowing as the labour market shifts into lower gear. 

Personal income increased by $233.6 billion in the second quarter, a downward revision of $4.0 billion from the previous estimate. Corporate profits, including inventory valuation and capital consumption adjustments, increased US$57.6 billion after declining by US$47.1 billion in the first quarter. 

Profits of domestic financial firms increased US$46.4 billion while those of non-financial institutions rose US$29.2 billion, more than offsetting a US$18.0 billion decline in profits from the rest of the world. When measured from the income side, the economy grew at a 1.3 per cent rate last quarter. 

Gross domestic income (GDI) increased at a 1.3 per cent pace in the January-March quarter.