The US government has revised second-quarter economic growth up to 2.9 percent from an initial estimate of 2.5 percent thanks to robust private-sector investment. The Commerce Department's gross domestic product (GDP) figure for the three months ended June was roughly in line with Wall Street's consensus forecast of 3.0 percent.
GDP growth fell sharply from 5.6 percent in the first quarter and was the weakest pace since the final quarter of 2005.
On the inflation side, the Commerce Department left its first estimate for the index of personal consumption expenditures (PCE) unchanged at 4.1 percent in the second quarter.
The core PCE rate, excluding food and energy costs, was revised down a notch to 2.8 percent from 2.9 percent, after rising 2.1 percent in the first quarter. It was still the rate's fastest pace of growth in more than five years.
The core PCE level is the Federal Reserve's preferred gauge of inflation. The US central bank this month called off a long-running campaign of interest rate hikes for fear of choking off the flagging economy.
The lift to GDP came as the Commerce Department reported massive investment by companies in infrastructure. At 22.2 percent, the rise in investment was the strongest since the second quarter of 1994.
But consumer spending rose a slower 2.6 percent in the second quarter, compared to a 4.8 percent increase in the first three months. Final sales rose 2.3 percent from 5.3 percent in the first quarter.
