The improvement in second-quarter GDP was driven in large part by strong consumer activity, but increased business spending also helped.
Most experts believe the central bank will raise rates just once more this year, but a faster economy or an increase in wages or inflation could prompt policymakers to move more quickly to tighten monetary policy and shrink the Fed's balance sheet in 2018. It marked the strongest quarter of growth since the first quarter of 2015.
"Even as we see daylight in today's economy, we find ourselves in the shadow of daunting longer-term challenges to economic growth and shared prosperity", said John Williams, president of the Federal Reserve Bank of San Francisco, in an august 2 speech.
For the second quarter, the government estimated that consumer spending grew at a 3.3 percent rate, the best showing in a year and up from an initial estimate of 2.8 percent growth.
Trump has alienated members of his own party, who face bruising battles in Congress next month over borrowing authority, the budget and reconstruction aid for areas battered by Hurricane Harvey.
The quarterly acceleration was also fuelled by an eighth-consecutive monthly increase in June that included a two per cent expansion in the construction sector - its largest gain in four years.
WASHINGTON, D.C.: The US economy grew at its fastest pace in more than two years in the second quarter, hitting President Donald Trump's goal for the first time since he took office, according to data released Wednesday.
During last year's presidential campaign, Trump repeatedly attacked the Obama administration's economic record.
For the moment, the growth forecasts for the year 2017 for the first world economy are, on average, as in 2016, around 2.1 %, of which that of the worldwide monetary Fund (IMF), which was recently reduced by 0.2 percentage point due to stimulus measures of the government have been slow to materialize. Consumer spending is up 3.3 percent revised from its previous 2.8 percent and accounted for a bulk of the growth, whereas savings went down from 3.7 from 3.9 percent. The country hasn't seen growth rates this strong in some seven years. Ironically, housing and investment in residential are experiencing some of the worst numbers in almost seven years.
Growth estimates for Q3 are being projected as high as 3.4 percent and seems to be starting off on the right foot.
The economists expect that the hurricane Harvey, which is now hitting Texas and Louisiana, weighs in on the economic growth.
Many forecasters expect continued modest growth in the coming years, shaped by long-term demographic and other forces. The GDP report sent it all the way to 1.2575. That would mark an improvement over past year when the economy grew a meager 1.5 percent, the poorest showing since 2009 when GDP shrank by 2.9 percent.