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U.S. Economic Growth Stronger Than Thought

NEW YORK --The U.S. economy grew significantly faster than thought in the second quarter...
NEW YORK (CNNMoney) --The U.S. economy grew significantly faster than thought in the second quarter, paving the way for Federal Reserve tapering.

The nation's gross domestic product -- the broadest measure of economic activity -- rose at a 2.5% annual rate from April through June, according to revised estimate from the Bureau of Economic Analysis Thursday.

That's much faster than the 1.7% rate originally reported, and better than the 2.1% rate that economists surveyed by Briefing.com were expecting.

All economic news is being closely watched for signs on when the Federal Reserve will begin curtailing its controversial bond-buying program, and the stronger economic growth emboldens views that the Fed could start pulling back as soon as next month.

The Fed has been buying some $85 billion a month in treasuries and mortgage-backed securities in an effort to keep interest rates low and spur economic growth. Last May, Fed Chairman Ben Bernanke outlined a plan to begin "tapering" the purchases, and pegged the timing of that plan to improving economic data.

Investors have taken that to mean as early as September, and have sent bond yields -- and interest rates on things like mortgages -- soaring.

The government revises its GDP figures several times after the initial release. This is the second estimate for second quarter GDP.

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