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U.S. economy back on track with strong second-quarter rebound

Published on Jul 31, 2014 2:49 AM

WASHINGTON (Reuters) - The U.S. economy rebounded sharply in the second quarter as consumers stepped up spending and businesses restocked, putting it on course to close out the year on solid footing.

Gross domestic product expanded at a 4.0 percent annual rate after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday. Previously, the government had said the economy contracted at a 2.9 percent rate at the start of the year.

The second quarter's expansion was much stronger than the 3.0 percent economists had expected and bolstered the outlook for the remainder of the year.

"The economy came back and even though there may have been a little extra inventory building ... solid activity was so widespread that you cannot call this number an aberration," said Mr Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

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