Major upward revision for first quarter economic growth estimate

The U.S. economy grew significantly more at the outset of this year than an initial measurement indicated, according to a major upward revision released on Thursday by the Commerce Department.

Gross domestic product increased at a 2% annualized rate for a three-month period ending in March -- a sizable jump from the previous estimate of 1.3%.

The fresh measurement slightly exceeds the 1.9% growth that had been originally forecast by economists surveyed by Bloomberg.

Despite the upward revision, U.S. economic growth over the first three months of this year was slower than the 2.6% growth in the previous quarter. In turn, that performance was down from 3.2% growth in the previous quarter.

The economic growth at the outset of this year was attributed to a rise in consumer spending and export sales, among other factors. An estimate of personal income over that period was revised upward by nearly 10% in the data released on Thursday.

The major upward revision marks the latest sign of resilient economic performance, despite an aggressive series of interest rate hikes by the Federal Reserve intended to slash inflation by slowing the economy and cutting demand.

Both consumer spending and hiring have remained solid. A jobs report earlier this month showed robust labor market growth in May, with 339,000 jobs added compared to Wall Street estimates of just 195,000.

However, while inflation has fallen significantly from a peak last summer, it remains at a level double the Federal Reserve's target of 2%.

Thursday's revised economic data arrives a day after Federal Reserve Chair Jerome Powell voiced an optimistic message about the U.S. economy and downplayed the threat of a recession.

"The U.S. economy has actually been quite resilient," Powell said on Wednesday in Sentra, Portugal, at a conference organized by the European Central Bank.

While acknowledging that a recession is "certainly possible," Powell said such an outcome is "not the most likely case."

Earlier this month, the Federal Reserve paused its aggressive series of interest rate hikes, ending a string of 10 consecutive rate increases that stretched back 15 months.

Despite continued strength, U.S. labor market growth has slowed from its previous breakneck pace, suggesting that demand for workers has waned and employers in turn have faced less pressure to offer high wages, Powell said.

A slowdown of wage increases offers hope for the inflation fight, he added.

"We're getting the softening we need," Powell said. "We're getting it slower than expected but it's nonetheless happening."