The numbers: The United States grew slightly faster in the spring than previously estimated, but not enough to reverse the underlying growth trend in an economy that has recovered fairly quickly from the pandemic.
Gross domestic product, the official scorecard of the U.S. economy, rose at a revised annualized rate of 6.6% in the second quarter, the government said Thursday. Originally, the increase stood at 6.5%.
The slight increase in GDP reflected slightly stronger consumer spending and US exports than initially reported.
The revised GDP report also included a first look at second-quarter corporate profits. Adjusted pre-tax profits increased at an annual rate of 9.2% and suggest that companies have a lot of capital to continue investing and contracting.
In fact, the economy was still expanding at a robust pace in the third quarter, even when the delta variant of the coronavirus soared and government stimulus had largely evaporated.
The economist surveyed by the Wall Street Journal estimates that third-quarter GDP will rise 7%.
Read: Delta makes Americans nervous and raises new concerns about the economy
General image: The details of the revised GDP do not change the view of the 10,000-foot economy. Consumers spend a lot of money. Companies hire and invest. And governments have avoided the stifling coronavirus restrictions they used in the early pandemic.
The delta variant of the coronavirus remains a wildcard, but the biggest problems facing the economy are the widespread shortage of labor and materials that have led to rising inflation and threaten to slow the recovery.
Inflation rose at an annual rate of 6.5% in the second quarter.
Key details: Consumer spending, the lifeblood of the economy, rose 11.9% revised in the second quarter compared to the initial estimate of 11.8%. Consumer spending accounts for about 70% of economic activity.
The increase in exports was revised to 6.6% from 6%, while the increase in imports was reduced to 6.7% from 7.8%.
Most of the other figures in the report changed little. Business investment fell, as did public spending.
What do they say? “Corporate America is doing very well,” said senior economist Bill Adams of PNC Financial Services. “The rapid growth of corporate profits and very low interest rates have supported the rise of the stock market to record highs.”
“While the delta variant remains a key risk of disadvantage and the fatigue of the virus leads to a strong negative emotional response, the economy is unlikely to go the other way around,” the economist told customers in a note. American Lydia Boussour, of Oxford Economics.
Read: Delta dealt a small blow to the economy in August, but companies remain optimistic
Market reaction: The Dow Jones Industrial Average DJIA,
pink and S&P 500 SPX,
fell slightly in early Thursday’s operations. Revised GDP reports rarely have any effect.