(CN) — The pace of economic growth picked up this spring, fueled by a surge in consumer spending, the Commerce Department said Friday.
According to government economists, the nation’s gross domestic product, a measure of the economy’s total output in goods and services, grew at a 2.6 percent rate between April and June.
While the pace of economic expansion was more than double the revised 1.2 percent pace for the first quarter, it was still well below President Donald Trump’s goal of 4 percent or better growth for the year.
The president vowed to achieve that level of growth through tax cuts and regulatory relief, much of which has yet to happen with the Republican-controlled Congress consumed until last night with its ultimately unsuccessful effort to repeal the Affordable Care Act.
The 2.6 percent growth in the second quarter was the fastest pace since the economy expanded at a 2.8 percent rate in the third quarter of last year.
The Commerce Department attributed much of the economic growth during the second quarter to a rise consumer spending, which grew at a 2.8 percent rate, up from a 1.9 percent growth rate in the first quarter.
Consumer spending accounts for 70 percent of economic activity.
The economy also benefited far more modest inventory reductions, which had been a drag on growth during the first quarter.
Business investment was also more robust in the second quarter, with spending on facilities and equipment growing at a 5.2 percent rate.
However, housing construction slowed to a 6.8 percent rate, a after an 11.1 percent surge in the winter due to warmer-than-normal weather.
The government sector grew at a 0.7 percent rate, driven entirely by a big jump in defense spending. Domestic federal programs and state and local governments all showed small declines.
In related news, the Bureau of Economic Analysis on Friday issued an annual benchmark revision of its data going back three years.
The revision shows slightly better growth in the U.S. economy that previously reported, raising the average growth during the recovery from recession following the 2008 economic crisis to 2.2 percent.
Previously is had been estimated to be 2.1 percent.
In yet another report, the bureau said employer compensation costs increased 0.5 percent for civilian workers, seasonally adjusted, from March 2017 to June 2017. Over the year, compensation rose 2.4 percent, wages and salaries rose 2.3 percent, and benefits rose 2.5 percent.