Gross domestic product, or GDP, grew at a revised 3.3 per cent annual rate in the three months from April to June, up from a 3.1 per cent rate reported a month ago. Wall Street economists had expected the figure to stay unrevised.

Separately, a key survey of consumers said confidence slipped in September, possible reflecting the strain from the continued lack of new jobs since the 2001 recession ended.

Analysts said it requires time for businesses to take up the economic slack and to begin hiring aggressively, something the Bush administration wants to happen well in advance of the November presidential elections next year.

Stronger GDP growth is a start, since it draws down stocks of unsold goods and makes room to ramp up production.

The second-quarter pace of expansion was more than double the 1.4 per cent in each of the two preceding quarters and was the strongest since 4 per cent in the third quarter last year.

GDP growth is widely predicted to accelerate to 4 per cent or higher in the third and fourth quarters, supported by a buoyant housing market and lean inventories, which imply businesses have more incentive to make new investments.

"It seems likely that inventory-building will help to support growth into next year, even if growth in demand moderates somewhat … as seems likely in the wake of the consumer's summer binge," economist Jade Zelnik of Greenwich Capital Markets said, adding GDP may have boomed ahead at a 5 to 6 per cent annual clip in the third quarter.