The US GDP growth has accelerated to 2.3 per cent in the second quarter, up from a revised 0.6 per cent in the quarter before, on the back of lower fuel prices and increased consumer spending, the advance data released yesterday by the bureau of economic analysis revealed.
The healthy GDP figures could prompt the US Federal Reserve to make a move towards an interest rate hike in September, the first rise since 2006.
Earlier this week, the fed chair Janet Yellen expressed cautious optimism about the strength of the world's largest economy.
"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market," a fed statement said.
Particularly, the fed is watching the job market and inflation data which could trigger a positive move.
The bureau has made an upward revision of the Q1 GDP growth from a 0.2 per cent contraction to 0.6 per cent expansion, reflecting steps taken by the government to refine the seasonal adjustment for some of the GDP components.
The second quarter growth was boosted by positive contributions from personal consumption, exports, state and local government spending and residential fixed investment that were partially offset by a deceleration federal government spending, private inventory investment and non-residential fixed investment
Consumer spending, which accounts for about 70 per cent of overall economic activity, grew 2.9 per cent in Q2, up from 1.8 per cent in the first quarter.
Non-residential fixed investment dropped to 0.6 per cent in Q2 from 1.6 per cent in the in Q1, while residential fixed investment increased 6.6 per cent compared with an increase of 10.1 per cent.
Exports of goods and services increased 5.3 per cent in Q2 in contrast to a 6-per cent decrease in the previous quarter. Imports slowed to 3.5 per cent during the quarter compared with a 7.1-per cent increase in Q1.
Federal government spending decreased 1.1 per cent in Q2 in contrast to a 1.1-per cent increase in the March quarter. In contrast, state and local government spending increased 2 per cent in Q2 compared to a decrease of 0.8 per cent in Q1.
The price index for gross domestic purchases, an indicator of prices paid by US residents increased 1.4 per cent in Q2, compared to 1.6-per cent decrease in the first quarter.
A second GDP estimate for the first quarter based on more complete data will be released on 27 August.
The US is one of the fastest growing economies in the developed world which clocked 2.4 per cent growth in 2014. The International Monetary Fund (IMF) has estimated the country's economy to grow 3.1 per cent this year, well above euro zone's 1.5 per cent and Japan's 1 per cent.
Meanwhile, on Tuesday the UK's office for national statistics (ONS) also registered a 0.7-per cent expansion in its preliminary GDP estimate, up from the previous quarter's 0.4 per cent and slightly above analysts' expectations.
Of the main sectors, services which represent about 80 per cent of the UK economy, and industrial output, increased while construction was flat and agriculture decreased.
Experts believe that the Bank of England is on track to consider an interest rate hike early next year.