Prior estimate 1.5%US Q2 GDP revised to 2.2% vs 1.5% expected; inflation measures softenReal GDP: +2.2% annualized vs +1.5% expected. Previous estimate +1.5%.Real final sales: +2.8% vs +2.3% expected. Previous estimate +2.2%.Consumer spending: +3.8%. Previous estimate +3.4%.GDP deflator: +6.1% vs +6.4% expected. Previous estimate +6.4%.Core PCE prices: +3.3% vs +3.6% expected. Previous estimate +3.6%.PCE prices: +5.0%. Previous estimate +5.3%.PCE prices excluding food, energy and housing: +3.1%. Previous estimate +3.4%.PCE services prices excluding energy and housing: +3.6%. Previous estimate +3.7%.The US second-quarter GDP figures show stronger growth and softer inflation than expected. Real gross domestic product increased at a 2.2% annualized pace, above the 1.5% consensus estimate and previous reading. The figures are from the Bureau of Economic Analysis report, as shown in the supplied release table.The improvement extends beyond the headline. Real final sales rose 2.8%, while consumer spending increased 3.8%, revised up from 3.4%. Final sales exclude changes in inventories, making the stronger reading a useful sign that demand was firmer than previously estimated.On inflation, the revisions went the other way. The GDP deflator eased to 6.1%, while core personal consumption expenditures (PCE) prices rose 3.3%, both below expectations. That is an encouraging adjustment, although these quarterly annualized readings still point to elevated price pressures.Quick analysis: The economy had more strength than the earlier estimate suggested, with consumers providing support. That could give the Federal Reserve more room to maintain restrictive policy. However, the softer inflation figures temper the hawkish message. Stronger growth would normally support the dollar and Treasury yields, while lower inflation could pull yields the other way and help equities. The report gives traders competing signals, and its backward-looking nature makes more recent inflation and employment data particularly important.What this report measures: Gross domestic product measures the value of final goods and services produced in the United States; real GDP adjusts for inflation. The annualized rate expresses how fast the economy would grow over a year if that quarter’s pace continued—it is not a year-over-year reading. Traders watch growth and the accompanying price measures for clues about demand, inflation and Federal Reserve policy. This article was written by Greg Michalowski at investinglive.com.