The US economy grew at a stronger pace than expected in the second quarter, with gross domestic product increasing at a 2.2% annualized rate. The latest reading was well above the previous estimate of 1.5%.

The Commerce Department’s Bureau of Economic Analysis released its third estimate for the April-through-June period on Sept. 30. Economists surveyed by LSEG had expected growth of 1.5%.

First-quarter GDP growth was raised to 2.5% from the previously reported 2.1%. The BEA revised economic data going back to 2021 as part of its annual update.

The stronger second-quarter reading was supported by robust consumer spending and business investment, including investment tied to the expansion of artificial intelligence infrastructure.

Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 3.8% annualized rate. That was revised up from the previous estimate of 3.4%.

Spending had risen at just a 0.7% rate in the first quarter.

The BEA said consumer spending, investment and exports contributed to the increase in real GDP. Imports also increased and are subtracted when GDP is calculated.

Investment in nonresidential structures was led by spending on data centers, along with commercial and health care construction.

Revisions to consumer spending were driven in part by recreation services, recreational goods and vehicles.

Another measure of domestic demand also came in stronger than previously reported. Real final sales to private domestic purchasers, which includes consumer spending and gross private fixed investment, rose at a 4.6% annualized rate.

That was revised up from 4.2%. The measure increased at a revised 1.8% rate in the first quarter.

Economic activity also looked stronger when measured from the income side. Gross domestic income increased at a 2.6% annualized rate in the second quarter, up from an earlier estimate of 2.2%.

The average of GDP and gross domestic income, another measure of overall economic activity, increased at a 2.4% rate. It had previously been estimated at 1.8%.

The stronger growth figures come as households continue to face pressure from inflation, including higher gasoline prices. A Conference Board survey cited by Reuters showed consumer confidence fell to a nearly 12-and-a-half-year low in September.

The Federal Reserve also raised interest rates in September for the first time in three years. The central bank increased its benchmark rate by 25 basis points, bringing the federal funds target range to 3.75% to 4%.

Despite pressure from inflation and higher interest rates, the revised second-quarter data show that consumer spending and business investment remained strong during the spring and early summer, lifting economic growth well above the government’s earlier estimate.