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 Gross domestic product likely grew at a 3.0 percent annual rate,
according to a Reuters survey of economists, lifted by an
acceleration in both consumer spending and stock accumulation by
businesses.
"Pretty much across the board, components will look better. I do
think we can sustain a 3 percent growth number for the next couple
of quarters," said Jim O'Sullivan, chief U.S. economist at High
Frequency Economics in Valhalla, New York.
Earlier in the second quarter, growth estimates were as high as 4
percent, but they were lowered as consumer spending and business
investment rebounded less than expected.
With output having contracted at a 2.9 percent pace in the
January-March period, first-half growth was likely flat. As such,
growth for the year as a whole could average below 2 percent.
The economy was slammed by an unusually cold winter in early 2014
and also hurt by a slower pace of inventory accumulation and the
expiration of long-term unemployment benefits - temporary factors
that have since lifted.
Employment growth, which has exceeded 200,000 jobs in each of the
last five months, and strong readings on the manufacturing and
services sectors from the Institute for Supply Management have
underpinned expectations for a strong finish to the year.
The Commerce Department will release its first snapshot of
second-quarter GDP at 8:30 a.m. EDT (1230 GMT) on Wednesday. It will
also publish revisions to GDP data going back to 1999 as well as for
the first quarter of 2014.
UPWARD GDP REVISIONS EYED
Economists expect upward revisions to output for the last three
years, noting that an alternative growth measure, gross domestic
income, is running above GDP. The government tends to revise GDP
towards GDI.
"Upward revisions to GDP would also be consistent with the
performance in the labor market, which has been unusually strong
relative to recent growth patterns," said Eric Green, chief
economist at TD Securities in New York.
The GDP data will be released only hours before U.S. Federal Reserve
officials conclude a two-day policy meeting. It is not expected to
have a material impact on the future course of monetary policy, with
Fed Chair Janet Yellen focused on labor market developments and
inflation.
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"Yellen will be looking to these revisions as affirmation that
growth and inflation are not worse than expected," Green said.
Consumer spending growth likely picked up after braking to a 1.0
percent pace in the first quarter because of weak healthcare
spending. The increase is anticipated despite weakness in spending
on utilities.
Inventories are expected to have added a full percentage point to
second-quarter GDP growth after slicing off 1.7 points in the prior
period, while exports were likely a drag on growth for a second
consecutive quarter.
Underscoring the economy's strengthening fundamentals, a measure of
domestic demand that strips out exports and inventories is expected
to have accelerated after almost stalling in the first quarter.
Business investment likely rebounded as did spending on home
building. Government spending is expected to have snapped two
straight quarters of declines.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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