The US economy looks strong as real gross domestic product grew at the fastest rate in almost four years last quarter, and consumer confidence in August hit the highest level since 2000.

US real GDP grew at an annual rate of 4.2% in the second quarter, according to the second estimate of GDP growth released today by the US Commerce Department.  

The new estimate is up from the previous estimate, which pegged growth at 4.1%, and the fastest rate since the third quarter of 2014.

While the general picture of economic growth remains the same, the new estimate primarily reflected upward revisions to nonresidential fixed investment and private inventory investment that were partly offset by a downward revision to personal consumption expenditures. Imports, which are a subtraction in the calculation of GDP, were revised downward. 

Real GDP for the US increased 2.2% in the first quarter.

Economists had expected second-quarter GDP growth would be revised down to 4.0%, Reuters reported. The robust second-quarter growth was driven by one-off factors such as a $1.5 trillion tax cut package, which provided a jolt to consumer spending after a lackluster first quarter, and a front-loading of soybean exports to China to beat retaliatory trade tariffs.

Meanwhile, The Conference Board reported its consumer confidence index in August hit the highest level since October 2000, but the labor market outlook was mixed.

Following a modest increase in July, the index rose to a reading of 133.4 (1985=100) from 127.9 in July.

“Consumer confidence increased to its highest level since October 2000 (Index, 135.8), following a modest improvement in July,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved further. Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018. Overall, these historically high confidence levels should continue to support healthy consumer spending in the near-term.”

Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs in the months ahead decreased to 21.7% from 22.6%, while those anticipating fewer jobs also decreased to 14.1% from 15.2%.

However, the number of consumers stating that jobs are “plentiful” was virtually unchanged at 42.7% in August, while those claiming jobs are “hard to get” decreased to 12.7% from 14.8%.

Separately, the US Bureau of Labor Statistics announced the Minneapolis-St. Paul-Bloomington area in Minnesota and Wisconsin posted the lowest unemployment rate among all large, US metropolitan areas in July at 2.6%. The New Orleans-Metairie area in Louisiana and the Cleveland-Elyria area in Ohio had the highest jobless rates among the large metropolitan areas in July at 5.6% and 5.5%, respectively.

The lowest unemployment rate among metropolitan areas of all sizes was in Ames, Iowa, at 1.8%. Yuma, Ariz., and El Centro, Calif., had the highest unemployment rates at 20.9% and 19.3%, respectively.