After a tumultuous week in the stock markets, there was some surprisingly good news out this morning from the Commerce Department. Following its initial estimate of second quarter GDP growth at 2.3 percent, Commerce has now revised that upward to a robust 3.7 percent.
What changed in the new revisions? Businesses increased investment by 3.2 percent increase of a drop of 0.6 percent, with spending on structures such as office buildings rising by 3.1 percent instead of the initial estimate of a drop of 1.6 percent. Consumer spending, the main driver of U.S. economic activity, was revised up slightly to 3.1 percent instead of 2.9 percent.
There were also upward revisions to state and local government spending and inventories. Also fueling the rise: Corporate profits rose an estimated 2.4 percent in the second quarter, after declining by 5.8 percent in the first quarter.