Video PlayerClose

WASHINGTON, July 28 (Xinhua) -- The U.S. economy grew at an annual rate of 2.6 percent in the second quarter of the year, higher than the revised 1.2 percent in the previous quarter, according to the first estimate released by the Commerce Department on Friday.

"The acceleration in real GDP (gross domestic product) growth in the second quarter reflected a smaller decrease in private inventory investment, an acceleration in PCE (personal consumption expenditures), and an upturn in federal government spending," the Commerce Department said.

Personal consumption expenditures, which account for about two-thirds of the U.S. economy, increased at an annual rate of 2.8 percent in the second quarter of the year. That was an acceleration from the 1.9 percent pace in the first quarter.

Driven by a surge in federal defense spending, the government expenditures grew at a rate of 0.7 percent in the second quarter, compared with a contraction of 0.6 percent in the first quarter.

While inventory investment slightly subtracted 0.02 percentage point from economic growth in the second quarter, trade added 0.18 percentage point to the growth in the quarter, according to the Commerce Department.

Nonresidential fixed investment, a measure of corporate spending on structures and equipment, climbed at a pace of 5.2 percent in the second quarter, down from a 7.2 percent growth rate in the previous quarter.

The latest GDP data confirmed that the U.S. economy is on track to deliver a 2 percent growth rate this year. "It's a 2 percent economy, plus or minus a little bit," said Michael Feroli, chief U.S. economist at JP Morgan.

The International Monetary Fund (IMF) also said on Thursday that it expected the U.S. economy to grow at 2.1 percent this year and next, supported by solid consumption growth and a rebound in investment.

The IMF believed the Trump administration is unlikely to accelerate annual U.S. economic growth to sustained 3 percent from the newly revised 1.5 percent in 2016, "even with an ideal constellation of pro-growth policies."

"The international experience and U.S. history would suggest that a sustained acceleration in annual growth of more than 1 percentage point is unlikely," the IMF said.