The US economy lost much less of its vigour in the spring than previously thought, the Commerce Department said yesterday as it sharply revised upward its estimate of second-quarter growth.

Gross domestic product, the broadest measure of national economic activity, grew at a 3.6 per cent annual rate in the April-June quarter, rather than the 2.2 per cent rate reported a month ago. Brisk production for inventories and stronger overseas sales accounted for most of the pick-up in the expansion rate.

The revised second-quarter GDP figure was above Wall Street's expectations of a 3.3 per cent rate of expansion. It follows a sizzling 4.9 per cent rate of first-quarter growth and robust growth at a 4.3 per cent pace in the final quarter of last year.