According to the Bureau of Economic Analysis, US gross domestic product – the output of goods and services produced by labor and property located in the United States – accelerated at a pace almost double of what was previously reported. In the latest quarter, GDP stood at 3.3%, upwardly revised from a 1.9% annualized pace. The number, reported by the Commerce Department, was way above expectations, as economists had expected a revised number closer to 2.7%.

Final sales were also upwardly revised, up to 4.8% annualized, from last month’s estimate of 3.9%. Core consumer prices were unrevised, rising at a 2.1% annual pace in the quarter.

The report also showed that the economy contracted in the fourth quarter of 2007, falling 0.2%. It was the the first drop in real gross domestic product since the recession of 2001. The economy grew at a revised 0.9% annual rate in the first quarter. Over the past year, the economy has grown 2.2%.

Report Details

Exports rose 13.2% in the second quarter, revised from an increase of 9.2%. Meanwhile, imports fell 7.6%. The trade deficit added 3.1% to growth.

Real consumer spending increased 1.7%, annualized, compared with the earlier 1.5% initial estimate. Spending on durable goods fell 2.5%, while spending on nondurable goods rose 4.2%, and spending on services increased 1.3%. Consumer spending contributed 1.2 percentage points to growth.

Investments in houses dropped at a 3.2% annual pace, revised from 3.4% earlier. Residential investments cut 0.6 percentage point from growth, marking the 10th consecutive quarter in which housing has been a drag on growth.

Business fixed investments shrank at a 2.5% annual pace, revised up from 2.4% earlier. Investments in equipment and software fell 3.2%, while investments in structures increased 2.2%. Business investments cut four-tenths of a percentage point from growth.

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