US economic growth accelerates in second quarter as spending picks up

The Fed described the economy as expanding 'moderately' while upgrading its view of the labor market, pointing the way to an interest rate hike

The US economy accelerated in the second quarter, further raising the prospect that the Federal Reserve will raise interest rates - which have been held near zero since the financial crisis - as early as September.

US gross domestic product (GDP) rose by 2.3% in the three months to the end of June, the Commerce Department said on Thursday. The growth figure is slightly lower than the 2.5% that economists predicted but much higher than the growth in the first quarter.