Second-Quarter GDP Growth Unexpectedly Revised Higher as Consumer Spending Accelerates

01:06 PM EDT, 09/30/2026 (MT Newswires) -- The US economy grew at a faster rate in the second quarter than previously projected amid robust consumer spending growth, the Bureau of Economic Analysis' third estimate showed Wednesday. Real gross domestic product increased at a 2.2% annualized rate in the quarter ended June, up from 1.5% growth reported in the second estimate. A Bloomberg survey found consensus expected the growth rate to remain unrevised. The reading follows an upgraded 2.5% expansion in the previous three-month period and an increase of 0.2% in the last quarter of 2025, according to government data. The GDP upgrade primarily reflects upward revisions to investment and consumer and government spending. Growth in consumer spending -- as measured by personal consumption expenditures -- was revised up to 3.8% from 3.4% previously reported, driven in particular by strength in durable goods. The print marked the strongest pace in six quarters, Stifel said in a note. Wall Street expected no change in consumer spending. Wednesday's BEA release included the annual update of the National Economic Accounts, revising GDP data from 2021 through the first quarter of 2026. Second-quarter headline PCE inflation was revised down to 5% from the prior estimate of 5.3%. Core PCE inflation -- which excludes the volatile food and energy components - moved to 3.3% from 3.6%, official data showed. In a separate report Wednesday, the BEA said the Federal Reserve's preferred inflation metric came in softer than expected on an annual basis in August as it downgraded readings for July. "The economy is carrying plenty of momentum, and even after the revisions, core inflation is well above the (Fed's) target and easing only gradually," Oxford Economics Chief US Economist Michael Pearce said in remarks emailed to MT Newswires. "The Fed will remain sensitive to upside risks to inflation, but we doubt they will deliver the (90 basis points) of tightening priced into markets over the coming year." The GDP and inflation reports follow a series of hawkish Fed commentary. On Tuesday, Fed Governor Michael Barr renewed calls for more interest rate increases to curb sticky inflation. Earlier this month, the Federal Open Market Committee delivered its first rate hike in just over three years to curb elevated inflation, while signaling that another rate increase could happen later this year. Markets are currently pricing in a 61% probability that the Fed will leave its benchmark lending rate unchanged next month, with the remaining odds in favor of a 25-basis-point hike, according to the CME FedWatch tool. The BEA's advance estimate of third-quarter GDP is due Oct. 29.