US SLIGHTLY REVISES UP ITS GDP ESTIMATE FOR Q2 TO 6.7%

The U.S. economy expanded at a 6.7% annual pace from April through June, the Commerce Department said Thursday, slightly upgrading its estimate of last quarter’s growth in the face of a resurgence of COVID-19 in the form of the delta variant.

The government’s estimate of growth in the second quarter — its last of three — was up from its previous estimate of a 6.6% annual pace that will likely mark a high point for the economy’s expansion this year as the virus slows some activity, government support programs wind down and manufacturing supply-chain issues persist.

Thursday’s report from the government showed that the nation’s gross domestic product — its total output of goods and services — accelerated from a 6.3% annual rate in the first three months of the year.

A key factor in the upgraded growth estimate for the April-June quarter was a slightly higher level of consumer spending, which accounts for roughly 70% of economic activity. Consumer spending grew at a 12% annual rate, the fastest expansion since a surge in the third quarter last year when the economy began to re-open.

Stronger export sales also added to the increased growth estimate for the second quarter. Exports rose at an annual rate of 7.6% after having fallen in the first quarter. Business equipment investment was also up from the government’s previous estimate, expanding at a solid 12.3% rate.

These gains were partly offset by a sharper increase in imports, which subtract from economic growth. Imports rose at a 7.1% annual rate in the second quarter.

The report showed that an inflation measure tied to GDP that excludes volatile energy and food costs rose 3.4% over the past year. That is the fastest such pace since 1991 and well above the Fed’s 2% goal for annual inflation.