The US economy is apparently in better shape than anyone dared hope – if the government has got its latest set of data right. The Commerce Department reported Thursday it had revised its earlier estimate of gross domestic product in this year’s first quarter from a preliminary 5.6% to a searing 6.1% annual rate - the best quarter since 1999.

The growth was driven by inventory liquidation (businesses disposing of unsold goods, a one-off factor) although even when this factor is removed from the equation, the economy grew by 2.6%. This is seen as a more moderate and sustainable rise capable of generating a Q2 growth rate of 2.5%.

Personal consumption expenditures rose 3.3% in Q1 and are expected to remain robust. And although an earlier report indicated that retail sales in May were down, the June data appear to have made up lost ground.

In a separate report, unemployment claims fell last week suggesting gradual improvement in the sagging job market, although at least one entrail-raker cautioned against undue optimism.

“You don't want to get excited about the unemployment rate going down,” says Maury Harris, chief US economist and managing director at UBS Warburg. He expects May’s jobless rate of 5.8% to rise to 5.9% in June when the latest set of data is released next week,

Data sourced from: The Wall Street Journal Online; additional content by WARC staff