U.S. economy grew faster than previously thought

WASHINGTON - The U.S. economy grew faster between April and June than previously thought, the U.S. Commerce Department said Thursday.

After a bleak start to the year, the country's gross domestic product rose in the second quarter at an annualized rate of 4.2 percent, up slightly from the agency's initial estimate of 4 percent growth for the period.

The revision reflected stronger business investment in new equipment and structures than first thought. Consumer spending also accelerated, as more Americans bought care and other big ticket items, noted Jim Baird, Chief Investment Officer for Plante Moran Financial Advisors.

The seasonally adjusted 4.2 percent annual growth rate for the gross domestic product came after the economy had shrink at an annual rate of 2.1 percent in the January-March quarter, the biggest drop in activity since the depths of the Great Recession.

Economists say the U.S. economy is picking up speed, while forecasting that weakness earlier in the year means overall growth for all of 2014 is likely to be soft.

"[A]lthough the weak first quarter means that GDP growth this year as a whole is still likely to be around 2 percent, a strong second half of the year sets things up nicely for growth of 3 percent next year," said Paul Dales, senior U.S. economist with Capital Economics, in a client note.