Economic Report: Economy’s 2nd-quarter growth raised to 3.1%

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The U.S. economy grew in the second quarter, a period covering April to June, at the fastest pace in two years.

The numbers: The U.S. economy’s pace of growth in the second quarter was raised to 3.1% from 3% under the government’s latest revisions to gross domestic product. The value of inventories rose by $5.5 billion, stronger than previously reported.

The increase in consumer spending was unchanged at 3.3%. Business investment in structures rose a stronger 7% instead of 6.2%. Exports were revised to show a smaller 3.5% gain. Imports advanced 1.5%.

Adjusted pretax corporate profits climbed 0.7% to an annualized $2.12 trillion, rebounding from a decline in the first quarter.

What happened: The somewhat stronger pace of growth in the spring shown by the latest government figures mostly reflects higher farmer inventories. The production of unsold goods such as crops or new cars adds to GDP.

Other key figures in the government’s third estimate of GDP, including readings on inflation, were little changed.

Big picture: The U.S. expanded in the spring at the fastest clip in two years, showing the economy has plenty of strength left more than eight years into a recovery.

Consumers have carried the load through higher spending, but businesses have upped the ante lately by investing more. Stronger profits also put companies in a better position to spend and invest.

The U.S. is on track to expand slightly faster than 2% in 2017, keeping in line with growth trends since the end of the Great Recession. Yet the recovery is also the weakest by historical standards: The U.S. has historically grown more than 3% a year.

What are they saying?: “Claims have been hugely distorted by the hurricanes,” said Ian Shepherdson of Pantheon Economics. “The period of volatility is not over yet.”

Market reaction: U.S. stock futures pointed to a lower opening for the Dow Jones Industrial Average DJIA, +0.25% and S&P 500 index SPX, +0.41%