The US economy grew at an annualised pace of 2.5% in the second quarter of the year, the Commerce Department said in revised figures. That was more than double the pace recorded in the previous three months, and above estimates of 2.2%.
The rise, helped by an increase in exports, is a further sign that the economy may be getting back on track. The government had originally estimated that GDP grew at a 1.7% rate in the second quarter. The revised non-annualised quarter on quarter figure was 0.6%, up from an initial 0.4% estimate.
Housing and business investment, two key sectors of the economy, remained strong in the revised figures. Housing construction grew at an annual rate of 12.9%, the fourth consecutive quarter of double-digit growth.
Meanwhile, business investment was revised up to a 16.1% rate.
The government also said data from retailers showed they had restocked their shelves at a faster pace in the April-to-June period than first thought.
The positive news could make US central bank economists more likely to begin reducing monthly bond purchases later this year. The program is one of the US's last stimulus measures.
Economists think growth will stay at the 2.5% rate in the second half of the year, boosted by steady job gains and less drag from federal spending cuts.
However the US trade deficit widened in July as exports fell and the more cars and car parts were bought from overseas. The trade gap rose 13% to 39.1bn dollars compared with June's 34.5bn, said the US Commerce Department.
Imports of cars, trucks, motoring parts and engines rose to a record 26.5bn. Much of that was supplied by US firms that have plants in Canada and Mexico.
July saw exports fall 0.6% from June's record level as sales of capital goods, such as aircraft and engines slowed. However the trend shows that the trade gap is closing. Including the July figures, the three month average fell to 39.1bn from 39.3bn dollars.
The US continues to run a huge trade deficit with China, and in July it hit a record of 30.1bn. The weakness of European economies is also evident in the data which showed US exports to the European Union falling by 7.4% to 21.1 billion in July.
Meanwhile car sales surged close to a six-year high in August as consumers grew more confident about an economic recovery. Sales jumped 17% from a year ago to 1.5 million vehicles. That translates to sales of some 16 million a year.
Japan's carmakers Toyota, Honda and Nissan all increased sales by more than 20%. The US's Ford, General Motors and Chrysler also saw double-digit growth.