This second GDP estimate for the April-June period, which remains subject to further revision, reflected higher sales of durable goods such as autos - a sector which has struggled in the first half of the year after a record 2016.
Most experts believe the central bank will raise interest rates just once more this year, but a faster economy or an increase in wages or inflation could prompt policymakers to move more quickly to tighten monetary policy and shrink the Fed's balance sheet in 2018. Fixed nonresidential investment rose at a 6.9% pace last quarter, up from an initial estimate of 5.2%, including stronger spending on software. It marked the strongest quarter of growth since the first quarter of 2015.
For his part, Donald Trump has welcomed this growth of the GDP considering that the administration was on the way to his goal of a 3% growth this year.
The U.S. economy picked up steam during the second quarter, notching the fastest pace of growth in two years.
Trump has alienated members of his own party, who face bruising battles in Congress next month over borrowing authority, the budget and reconstruction aid for areas battered by Hurricane Harvey.
From April to June, the expansion of the GDP of the United States is established at 3 % in an annualized and seasonally adjusted data, compared to +1.2% in the first quarter.
The economy was on a strong footing ahead of the third quarter with June growth of 0.3%, suggesting it may have more momentum in the second half of the year than anticipated.
The U.S. dollar softened against a basket of currencies following lackluster U.S. economic data that failed to boost expectations for another Federal Reserve rate increase this year. Consumer spending is up 3.3 percent revised from its previous 2.8 percent and accounted for a bulk of the growth, whereas savings went down from 3.7 from 3.9 percent.
A separate earnings measure produced by the Commerce Department, pretax profits with inventory valuation and capital consumption adjustments, rose 1.3% last quarter after falling 2.1% in the first three months of 2017, and was up 7% over the past year.
The quarterly GDP growth rate was above 3% eight times during President Barack Obama's eight years in office. "It puts us on a stronger path going into the third quarter, although Hurricane Harvey introduces some uncertainty".
Today's news on GDP is without question good news for the economy.
Despite almost uniform skepticism from mainstream economists, he insisted that much faster economic growth was within reach.