Real gross domestic product — which measures the output of goods and services produced in the economy — increased at an annual rate of 1.3% in the second quarter, according to the Commerce Department. The latest reading is up from an earlier estimate of GDP growth of 1% for the three months ended June 30. In the first quarter, real GDP increased only 0.4%. "The upward revision to second-quarter growth was mainly due to faster consumption growth of 0.7% compared with 0.4% previously," said Paul Dales, senior U.S. economist for Capital Economics. "This was despite a downward revision to real disposable income growth, to 0.6% from 1%, meaning that households dipped further into their savings," according to Dales. "The contribution from net trade was also larger than previously thought, as export growth was stronger and import growth weaker." The Commerce Department's Bureau of Economic Analysis said second-quarter real GDP growth reflected positive contributions from nonresidential fixed investment, personal consumption expenditures exports and federal government spending. "We'll know more after the release of August's personal spending data (Friday), but it looks as though GDP growth may come in close to 2.5% in the third quarter," Dales said. "Indeed, the strength of capital goods shipments in August points to a decent rise in business investment in the quarter as a whole." Still, Dales doesn't expect stronger GDP growth in the fourth quarter nor in 2012 with households still deleveraging. "We expect GDP growth of just 1.5% next year, which won't be enough to reduce the unemployment rate," Dales said. Write to Kerri Panchuk.