Economy stronger than expected in April-June

Revised GDP data show 3.7% growth

WASHINGTON — The U.S. economy staged a far bigger rebound last quarter than first thought, outpacing the rest of the developed world and bolstering confidence that it will remain sturdy in coming months despite global head winds.

The economy as measured by gross domestic product expanded at an annual rate of 3.7 percent in the April-June quarter, the Commerce Department reported Thursday. That’s more than a percentage point greater than the initial 2.3 percent estimate and a sharp upgrade from the 0.6 percent advance during the January-March quarter.

To be sure, the GDP report provides a backward look at the U.S. economy.

Since the spring, it has been hit with deepening concerns about a slowdown in China and recent turbulence in global financial markets.

It remains unclear how the U.S. will fare in the months ahead if developments abroad deteriorate.

The robust second-quarter numbers, however, indicate a level of growth unmatched by the rest of the developed world and a solid footing heading into the second half of the year.

“The U.S. economy entered the current market turbulence with momentum, which will help it to shrug off the drag from China and other developing economies,” said Diane Swonk, chief economist at Mesirow Financial.

In contrast, Japan — the world’s No. 3 economy — shrank at an annual pace of 1.6 percent in the second quarter. Germany eked out 0.4 percent growth, while the United Kingdom expanded at 0.7 percent. France didn’t grow at all.

The U.S. economy will probably cool slightly in the third quarter, but economists still expect solid growth that should keep fueling jobs and spending.

Paul Ashworth, chief U.S. economist at Capital Economics, projects GDP growth of 2.5 percent in the July-September quarter.

The revision for secondquarter growth was broadbased, reflecting more robust spending by consumers, businesses and government.

Consumer spending grew at annual rate of 3.1 percent, up from a 1.8 percent growth rate in the first quarter.

Business investment in structures and equipment was revised higher to show growth of 3.2 percent instead of a decline. Housing construction jumped 7.8 percent, up from an initial estimate of 6.6 percent growth.

Also fueling growth were strong gains in state and local government spending.

MIKE GROLL/AP Workers harvest apples at Samascott Orchards in Kinderhook, N.Y. Revised U.S. economic numbers show consumers, businesses and government are spending more.