U.S. economy growing at fastest pace since 2015

An auto carrier driver unloads a new Ram pickup truck in Gaithersburg Maryland

Real GDP of the US rose at an annualized rate of 3 percent in the second quarter, according to the second BEA estimate.

New figures show the USA economy expanded by 3% in the three months to the end of June, growing at its fastest pace in more than two years.

The department had previously estimated the nation's gross domestic product, the broadest measure of economic health, grew at a 2.6 percent growth rate. Economists had anticipated a second-quarter rebound following 1.2 percent GDP growth in the first three months of the year.

The revisions bring the pace of first-half growth to 2.1 percent, about equal to the average rate since the last recession ended in 2009.

However, the latest figures reflect robust consumer spending and strong business investment, and mean growth for the April-June period was at its strongest since the first quarter of 2015.

The acceleration in spending also suggests that a so-called Trump bump - improved sentiment among consumers and more optimism among business leaders - may be translating into concrete actions like homeowners buying appliances and companies investing in software or equipment.

On the downside, residential investment and state and local spending were weaker than in the first three months of the year.

The pace of growth is in line with the Trump administration's long-term goal of 3 per cent.

"The economy is stronger than you think", said Chris Rupkey, chief financial economist at Mitsubishi UFJ Financial Group in NY.

"Underlying domestic demand in the economy is consistent with near three percent growth but the supply-side of the economy is not capable of delivering such a pace of growth at this point", John Ryding, chief economist at RDQ Economics in NY, told CNBC.

Private economists believe that forecast is highly optimistic.

This was higher, too, than economists' expectation for 2.8% growth.

This morning's report suggests that the US economy is on a more solid footing than previously thought with growth revised up more than expected - albeit on par with our own call. Corporate pretax earnings rose 7 percent year to year; up 1.3 percent quarter to quarter. That's still well under the Federal Reserve's desired inflation rate in a range of 2.0% to 2.5%.

The economy will also be boosted by higher spending on the military and infrastructure projects, Zandi said. Therefore, net exports added 0.21 percentage points to real GDP growth.

But economists said it did not alter the picture significantly.