US economic growth in second quarter revised up

The economy grew at a 1.4 percent pace in the first quarter. Economists polled by Reuters had expected an unrevised 2.8 percent GDP growth.

Consumer spending, which accounts for more than two-thirds of the economy, rose at an upwardly revised 2.9 percent pace. Growth had been previously reported at 2.3 percent. That offset declines in business investment, exports and private inventory investment.

Spending is supported in part by wage increases, but momentum is slowing as the labor market loses speed. Personal income rose by $233.6 billion in the second quarter, a downward revision of $4 billion from the previous estimate.

Corporate profits, including adjustments for inventory valuation and capital expenditures, rose $57.6 billion, after falling $47.1 billion in the first quarter.

Profits at domestic financial firms rose by $46.4 billion, while those at non-financial institutions rose by $29.2 billion, more than offsetting an $18 billion decline in profits at the rest of the world.

From an income perspective, the economy grew at a rate of 1.3% last quarter. Gross domestic income (GDI) increased at a similar rate in January-March.