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#GNN - U.S. economic growth likely rebounded in the second-quarter from a winter-induced slump at the start of the year and will probably continue to gather momentum through the rest of 2014.

Gross domestic product likely grew at a 3.0 percent annual rate, according to a Reuters survey of economists, lifted by an acceleration in both consumer spending and stock accumulation by businesses.

"Pretty much across the board, components will look better. I do think we can sustain a 3 percent growth number for the next couple of quarters," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

Earlier in the second quarter, growth estimates were as high as 4 percent, but they were lowered as consumer spending and business investment rebounded less than expected.

With output having contracted at a 2.9 percent pace in the January-March period, first-half growth was likely flat. As such, growth for the year as a whole could average below 2 percent.

The economy was slammed by an unusually cold winter in early 2014 and also hurt by a slower pace of inventory accumulation and the expiration of long-term unemployment benefits - temporary factors that have since lifted.

Employment growth, which has exceeded 200,000 jobs in each of the last five months, and strong readings on the manufacturing and services sectors from the Institute for Supply Management have underpinned expectations for a strong finish to the year.

The Commerce Department will release its first snapshot of second-quarter GDP at 8:30 a.m. EDT (1230 GMT) on Wednesday. It will also publish revisions to GDP data going back to 1999 as well as for the first quarter of 2014.

UPWARD GDP REVISIONS EYED
Economists expect upward revisions to output for the last three years, noting that an alternative growth measure, gross domestic income, is running above GDP. The government tends to revise GDP towards GDI.

"Upward revisions to GDP would also be consistent with the performance in the labor market, which has been unusually strong relative to recent growth patterns," said Eric Green, chief economist at TD Securities in New York.

The GDP data will be released only hours before U.S. Federal Reserve officials conclude a two-day policy meeting. It is not expected to have a material impact on the future course of monetary policy, with Fed Chair Janet Yellen focused on labor market developments and inflation.

"Yellen will be looking to these revisions as affirmation that growth and inflation are not worse than expected," Green said.

Consumer spending growth likely picked up after braking to a 1.0 percent pace in the first quarter because of weak healthcare spending. The increase is anticipated despite weakness in spending on utilities.

Inventories are expected to have added a full percentage point to second-quarter GDP growth after slicing off 1.7 points in the prior period, while exports were likely a drag on growth for a second consecutive quarter.

Underscoring the economy's strengthening fundamentals, a measure of domestic demand that strips out exports and inventories is expected to have accelerated after almost stalling in the first quarter.

Business investment likely rebounded as did spending on home building. Government spending is expected to have snapped two straight quarters of declines.

(GNN,Reuters,AIP)(Reporting by Lucia Mutikani; Editing by Paul Simao)

(GNN) - A gauge of U.S. consumer spending rose solidly in June, in the latest sign that the economy ended the second quarter on a firmer footing.

That momentum appeared to have carried into the third quarter, with other data on Tuesday showing factory activity in New York state expanded sharply in July.

"It reinforces what looks to be an economy gaining more traction," said Eric Green, chief economist at TD Securities in New York.

The Commerce Department said core sales, which strip out automobiles, gasoline, building materials and food services, increased 0.6 percent last month after rising an upwardly revised 0.2 percent in May.

Core sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported as being flat in May and economists expected them to rise 0.5 percent in June.

U.S. stocks traded higher, while prices for U.S. Treasury debt rose marginally.

June's gains and May's upward revision suggested an acceleration in consumer spending in the second quarter after it was held back by weak healthcare spending in the first three months of the year.

A surprise drop in receipts for automobiles, however, saw overall retail sales rise only 0.2 percent in June after a 0.5 percent advance in May.

While the rise in retail sales lagged economists' expectations for a 0.6 percent increase, June's report added to signs of the economy's strengthening fundamentals, which could buoy optimism the recovery is on a self-sustaining path.

The economy contracted sharply in the first quarter, but that was probably a temporary setback.

BRIGHTENING OUTLOOK

From employment to manufacturing, the economy appears to be firing on nearly all cylinders, with even housing regaining its footing after slumping in late 2013 following a run-up in mortgage rates. Growth estimates for the second quarter top a 3.0 percent annual rate.

The steady run of fairly upbeat data, as well as slightly higher inflation readings, prompted Goldman Sachs to move forward its expectations for the first interest rate increase by the Federal Reserve to the third quarter of next year from the first quarter of 2016.

The U.S. central bank, which is winding down its monthly bond purchasing program, has kept its benchmark interest rate near zero since December 2008.

Fed Chair Janet Yellen told lawmakers on Tuesday that while the economy continued to improve, the recovery was not yet complete, citing still-high unemployment.

In another report, the New York Fed said its Empire State general business conditions index jumped to 25.60 this month, the highest since April 2010, from 19.28 in June.

New orders edged up, while factory employment and shipments surged. The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

Overall retail sales in June were restrained by a 0.3 percent fall in receipts at auto dealerships. The decline is surprising given automakers reported a surge in motor vehicle sales in June.

Auto sales had increased 0.8 percent in May. Excluding autos, sales grew 0.4 percent after rising by the same margin in May. There were increases in sales at non-store retailers, which include online sales, as sales at clothing retailers.

Receipts at sporting goods shops rose as did those at electronics and appliances stores. But sales at building materials and garden equipment suppliers fell 1.0 percent.

In another report, the Commerce Department said business inventories rose 0.5 percent in May after advancing 0.6 percent the prior month, suggesting restocking will still be a boost to second-quarter growth.

(Reuters)(GNN - AIP)(Reporting by Lucia Mutikani, additional reporting by Rodrigo Campos in New York; Editing by Meredith Mazzilli)