The US economy grew faster than expected in the second quarter, according to figures published today. The Commerce Department said GDP grew at a 3.3pc annual rate in the three months to June, up from the previous 3.1pc estimate. The economy expanded by just 1.4pc in the first quarter. Economists had forecast GDP would not be revised from the 3.1pc gain reported last month. Unusually robust defence spending due to the war effort in Iraq - up 45.8pc in the second quarter for the strongest quarterly growth since 1951 in the Korean War era - was one of the main drivers of growth in the second quarter.
Consumer spending, which accounts for two thirds of the economy, increased at a 3.8pc annual rate in the second quarter, nearly double the first quarter's 2pc. Economists expect the economy to improve further in the third quarter to September. The consensus forecast of economists is 4.9pc, with some talking about growth in excess of 6pc. The euro has weakened slightly against the dollar this afternoon, slipping to USD1.1449 from USD1.1475 this morning. //www.fxcentre.com