Personal spending was stronger than thought in the second quarter, helping to drive real GDP to a very solid 3.9% annualized rate.

Boosted by the consumer, final sales also rose 3.9% for a 4 tenths upward revision.

Personal consumption expenditures were revised 5 tenths higher to 3.6% as the service spending component, reflecting strength in travel, was revised 7 tenths higher to 2.7%.

Revisions to goods spending were mixed with durables down 2 tenths to a vehicle-led surge of 8% with nondurables up 2 tenths to 4.3%. Consumer strength is also evident in a 1.5 percentage point upward revision to residential fixed investment, now at 9.3%.

But businesses also contributed to the quarter's growth as nonresidential fixed investment, driven by structures, is revised 9 tenths higher to 4.1%. Another plus in the report is a downward revision to inventory growth.

The second quarter managed in the end to meet what were tough expectations for a big bounce from the transitory factors of the first quarter when growth came in at only 0.6%. The outlook for the third quarter, however, is so far subdued, at roughly the 2% area.

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