US economic growth in the second quarter revised higher on stronger business investment

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Kevin Lamarque/Reuters

US President Donald Trump takes part in a groundbreaking with Wisconsin Governor Scott Walker (L) and Foxconn Chairman Terry Gou (R) during a visit to Foxconn's new site in Mount Pleasant, Wisconsin, U.S., June 28, 2018.

The US economy in the second quarter grew even faster than had been previously estimated, according to a report from the Commerce Department on Wednesday.

Gross Domestic Product, the value of every good and service produced domestically, rose at an annual rate of 4.2%. The advance estimate released in July had penciled in second-quarter growth at 4.1%, which was the fastest rate in four years.

Wednesday's upwared revision, based on more complete data, showed that business investment and inventories contributed more to growth than previously thought.

The April-June period was the first full quarter with the tax cuts signed by President Donald Trump in effect. Consumer spending rebounded from the first quarter and, as usual, was the biggest contributor to growth, the advance estimate showed. Business investment and government spending also increased in the first estimate.

Expectations for growth in the current quarter vary widely. The Atlanta Federal Reserve's GDPNow forecasting model estimates that the economy will grow 4.6% in the third quarter. But the New York Fed's Nowcast model has growth at just 1.96%.

Many economists are doubtful that the economy can sustain a 4% growth rate, partly because of a yearslong slowdown in productivity.

This story is developing, refresh for updates.

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