US Economy Grew at 4% Rate in Second Quarter, Beating Expectations

The United States economy rebounded in the spring after a dismal winter, the Commerce Department reported on Wednesday, growing at an annual rate of 4 percent for the three months from April through June.

The increase exceeded economists' expectations and further cemented their views that the decrease in America's overall output during the first quarter was most likely a fluke tied in large part to unusually stormy winter weather as well as other anomalies. Any dip in gross domestic product outside of an official recession is considered rare.

During the first quarter, output shrank by 2.1 percent, less than had been reported, according to the Commerce Department's newly revised G.D.P. figures, also released on Wednesday. The department had previously said first-quarter output decreased 2.9 percent.

'The really ugly G.D.P. report for the first quarter was likely the result of mostly one-off events,' Bob Baur, chief global economist for Principal Global Investors, wrote in a note to clients before Wednesday's release.

Mr. Baur said industrial output was rebounding and jobless claims were near lows, adjusted for work-force size, both of which were propelling second-quarter growth. Inventories, which had been growing slowly in the first quarter, were picking up. Also, the Conference Board said on Tuesday that consumers were more upbeat about the economy than they had been in about seven years.

Economists had been hoping for a full reversal of the first quarter's decline. The consensus forecast for G.D.P. was 3 percent.

Also on Wednesday, the Commerce Department was revising figures dating to 1999. Economists were hoping those revisions would adjust for numerous data irregularities in past quarters brought on by events like changes in health care spending related to the Affordable Care Act.

Douglas Handler, chief United States economist for IHS Global Insight Analysis, said one-time events like bad weather and health care spending were not only a drag on the economy, but also that they would have lasting effects. 'If you go to a restaurant every week and couldn't this year because of the snow, you're not going to now go out twice a week or order two dinners,' he said. 'That G.D.P. will be permanently lost.'

While the economy seems generally to be bouncing back from the recession, overall growth remains lackluster. Wages have failed to rise significantly, an area of concern that Janet L. Yellen, chairwoman of the Federal Reserve, noted when she appeared before Congress this month.

Second-quarter earnings for many companies were mixed. Home prices are rising at the slowest pace in more than a year. Many economists say the mediocre housing market and underwhelming labor conditions are the driving forces behind the Fed's plan to keep interest rates low well into next year.

More important economic data will be released this week. The Federal Reserve's policy-making committee continues meeting on Wednesday, with the central bank announcing its latest plans on Wednesday afternoon. And on Friday, the Labor Department is to announce the latest figures on unemployment and payrolls for July.

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