US shares climbed yesterday after revised figures showed that the American economy was much stronger in the spring than previously reported.

The Commerce Department adjusted its annualised estimate for second-quarter gross domestic product growth from the 1.9 per cent it announced in July to 3.3 per cent — the fastest rate in nearly a year. The 0.9 per cent GDP growth calculation for the first quarter was unchanged.

The Dow Jones industrial average rose 212.70 points to close at 11,715.20, the S&P 500 gained 19.00 points to finish at 1,300.65 and the Nasdaq was up 29.18 points to 2,411.64. The improvement was attributed to better exports, declining imports and consumer spending boosted by tax rebates. The data showed that exports grew at an annualised rate of 13.2 per cent, higher than the Government’s initial estimate of 9.2 per cent. Imports fell at a rate of 7.6 per cent.

However, analysts cautioned that much of the second-quarter GDP growth was driven by the weak dollar, which boosted exports by making America’s goods and services cheaper for foreign buyers. The impact of more than $100 billion of tax rebates also helped to offset the effect of the housing slump and high energy costs.

Analysts predicted that the US would benefit less from exports in the second half of the year as the economies of Europe and Japan slowed and the dollar gained value. Meanwhile, with many of the tax rebates already spent, the economy would not benefit as much from the fiscal stimulus in the latter half of the year.

Lou Crandall, chief economist for Wrightson Icap, said: “The revised GDP figure is certainly not a bad thing, but it is an imprecise estimate of the true health of the economy. GDP could turn negative in the second half.”

Brian Fabbri, chief US economist for BNP Paribas, said: “The GDP figure may not say it, but this country is still in trouble. Corporate profits have fallen for four consecutive quarters, companies have fired 60,000 workers a month in the past seven months and the outlook for the economy is pretty grim.”

Separately, the Labour Department released figures showing that the number of initial unemployment benefit claims fell by 10,000 to 425,000 in the week ended August 23, marking its third successive weekly decline. Although the figures were in line with expectations and did not reflect a significant change in the underlying situation, analysts agreed that the outlook for the economy has improved.

On Tuesday the New York-based Conference Board’s confidence index, a key measure of consumer sentiment, rose from 51.9 to 56.9 for July and on the same day the Commerce Department said that sales of new single-family homes rose by 2.4 per cent in July to an annual rate of 515,000 units, the highest since April.

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