WASHINGTON (AP) — After a grim start to the year, the economy roared back to life in the spring, supporting expectations that the second half of 2014 will turn out far better than the first half.
On Thursday, the government will revise its estimate of just how fast the economy grew in the April-June quarter. It will be its second of three estimates.
In its first estimate last month, the Commerce Department said the U.S. gross domestic product — the economy's total output of goods and services — grew at a seasonally adjusted annual rate of 4 percent.
That marked a striking turnaround from the January-March quarter, when the economy shrank at an annual rate of 2.1 percent — the biggest quarterly drop since the depths of the Great Recession in 2009. The decline largely reflected the effects of a harsh winter that kept consumers away from shopping malls, disrupted factory production and depressed the economy.
Economists have forecast that the government will slightly downgrade its estimate of second-quarter growth to say the economy expanded at a 3.9 percent annual rate. Most think the trade deficit will prove to have been less of an economic drag than first estimated but that stockpiling by businesses will provide a bit less support.
A downward revision in inventory building would, however, likely help boost growth in the current July-September quarter because it would mean that businesses would need to restock their supplies to meet demand.
With the wild swing between the first quarter's sharp slump and the vigorous rebound in the second quarter, annual economic growth has averaged a meager 1 percent for the first six months of this year. Still, most analysts think the economy has regained momentum as the job market has strengthened. They foresee a healthy annual growth rate of around 3 percent in the current quarter and in the final three months of the year.
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