Economy grows strongly in spring

WASHINGTON (AP) -- The remarkable U.S. economy, once again confounding the experts, grew at a robust annual rate of 5.2 percent in the spring, as a surge in investment by American businesses offset a slowdown in consumer spending.

The Commerce Department said Friday that the increase in the gross domestic product -- the broadest measure of economic health -- in the just-completed April-June quarter surpassed growth in the first quarter, when the economy was growing at a 4.8 percent annual rate.

The acceleration in activity in the second quarter came as a surprise to economists, who had widely forecast that the economy had slowed in the spring under the impact of a series of interest rate increases by the Federal Reserve.

The spring slowdown has now been erased and economic data released this week indicate that the current third quarter is starting at a strong pace as well.

"We essentially have a very strong economy. Business investment is just roaring," said Asha Bangalore, an economist at Northern Trust Co. in Chicago.

She noted that in addition to the strong GDP report, the government released data on Thursday showing that new orders for big-ticket manufactured goods surged by 10 percent in June while Americans' wages and benefits rose over the past 12 months at the fastest pace in nine years.

Before Friday's release, economists had been estimating that GDP growth slowed.