Gross domestic product advanced at a revised 3.7% annual rate (2.7% y/y) in Q2 versus the initial estimate of 2.3% growth. The figure represents broad improvement from a 0.6% Q1 advance, restrained by severe winter weather and West coast port closings. It outpaced consensus expectations for a 3.3% rise in the Action Economics Forecast Survey.

The first look at after-tax corporate profits indicated a 5.1% rise (7.3% y/y), the strongest gain in a year. Financial industry profits grew 9.4% (-1.9% y/y) and nonfinancial sector earnings improved 1.3% (1.2% y/y). Earnings from the rest of the world eased 0.7% (-4.4% y/y), down for the fifth quarter in the last six.

Growth in each of the component series was raised. Domestic final sales grew at a 3.2% rate, up from 2.2% estimated initially, as consumer spending grew at a 3.1% rate, up from 2.7% in Q1. Motor vehicle purchases improved at a 10.5% rate (4.6% y/y) following a 3.5% decline and furnishings & household equipment buying grew at a fairly steady 4.6% rate (5.5% y/y). Apparel spending snapped back at a 6.2% rate (3.7% y/y) after a 1.1% decline and services purchases grew at a steady 2.0% rate (2.9% y/y), bolstered by a 7.5% jump (5.1% y/y) in restaurants and hotels.

Business fixed investment was decidedly firmer, posting a 3.2% rise, revised from a 0.6% decline. The gain followed a 1.6% Q1 increase and owed to 3.2% rise (-0.6% y/y) in structures investment, revised from -1.6%. It was recovering after a 7.4% Q1 decline. Equipment spending eased 0.4% (+3.1% y/y), revised from -4.1%. Information processing investment fell along with transportation equipment spending. Investment in intellectual property products increased 8.6% (7.3% y/y), the strongest gain since Q4 2007. Spending on research development jumped 12.2% (7.9% y/y).

Residential fixed investment growth eased slightly to 7.8% from 10.1% in Q1, but nevertheless continued a stretch of five quarters of firm gains.

Government spending growth was raised to 2.6% from 0.8% as state & local spending increased 4.3% (1.4% y/y), rebounding after a 0.8% shortfall. Federal government purchases were unchanged (-3.3% y/y) after a 1.1% rise, held back by a 0.4% decline (+1.3% y/y) in nondefense purchases. Defense spending grew 0.3% (-1.3% y/y).

The contribution to GDP growth from inventory investment was raised to 0.2 percentage points, revised from a 0.1 point subtraction. That was down from a 0.9 Q1 addition. Foreign trade added 0.2 percentage points to GDP growth as exports grew 5.2% (1.5% y/y) and outpaced the 2.8% gain (4.8% y/y) in imports.

The GDP price index advanced at a little-revised 2.1% rate. The personal consumption price index rose 2.2% and the index less food & energy increased 1.8%. The business fixed investment price index fell at a 1.1% rate (+0.1% y/y), the largest decline in nearly six years, while the residential price index declined 0.8% (+2.6% y/y).

The GDP figures can be found in Haver's USECON and USNA databases; USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts, including the integrated economic accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.