The U.S. economy grew faster than originally estimated in the second quarter, as a boost in exports offset continued weakness in government spending.
The Commerce Department said gross domestic product expanded at an annualized rate of 2.5 percent from April to June, considerably above earlier estimates of 1.7 percent growth. Growth was more than double that of the same period a year ago.
"The U.S. economy is in the middle stages of recovery, still a distance from the
finish line but seemingly headed toward more stable ground," Glenmede's director of portfolio management Laura LaRosa said in a note to clients. "This conclusion is based on several indicators, including the following: an improving housing market, stronger consumer sentiment and commentary by the Federal Reserve
signaling the near-term tapering of stimulative monetary policy."
The improved economic report should stabilize stock and bond markets, which have been in a tizzy over expectations that the Fed would begin ending its monthly $85 billion asset purchases and over concerns of possible U.S. military strikes against the Syrian regime.
Stock futures rallied on the news ahead of the New York Stock Exchange's opening Thursday morning.
Separately, the Labor Department reported that weekly claims for unemployment benefits fell by 6,000 to 331,000 and the four-week moving average is now at levels not seen since 2007.
Overall unemployment remains stuck though, in the mid-7 percent range, as companies find ways to do more with fewer workers and take longer to fill open positions. That is likely to keep the economy a hot topic among politicians going into the fall.
Still, housing sales remain strong though off their torrid pace of a few months ago, while consumers continue to express confidence about the current state of the economy.
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