Soaring defence spending pushed US economic growth in the second quarter to a faster pace than previously thought, the government reported today.
Gross domestic product grew a revised 3.1 per cent in the second three months of the year, the US Commerce Department said - a figure broadly in line with Wall Street expectations for a 3 per cent gain.
That was up from the 2.4 per cent rise estimated a month ago and followed anemic 1.4 per cent growth in each of the two prior quarters.
It was the fastest expansion since the third quarter of last year and is likely to bolster hopes for strong growth in the current quarter.
Spending on defence, much of it to pay for the US-led war in Iraq, surged 45.9 per cent, up from the 44.1 per cent estimated a month ago. This was the strongest gain since the third quarter of 1951, during the Korean War.
In a sign that business confidence is returning, nonresidential spending - the broadest category of investment - rose 8 per cent in the spring quarter, up from the 6.9 per cent reported a month ago, after a drop of 4.4 per cent in the first quarter.
Business investment, touted as a key to economic recovery, has lagged since the 2001 recession.
Consumers, who fuel two-thirds of national economic activity, were also in a buoyant mood with consumer spending rising 3.8 per cent.