- Second-quarter GDP forecasts were ratcheted up after Thursday's durable goods, and trade and inventory data.
- Economists in the CNBC/Moody's Analytics Rapid Update now see a median forecast of 2.9 percent, up 0.3 percentage point.
- GDP is reported at 8:30 a.m. ET Friday.
Economic growth is expected to be double the first quarter's pace when second-quarter GDP data is released Friday morning.
Economists Thursday raised their growth forecasts, after better-than-expected details in inventories and trade data. The showed a median forecast of 2.9 percent for second-quarter growth, up 0.3 percentage point on the one day's data, and now more than double the first quarter's 1.4 percent growth rate.
But the forecast is still below the 3.8 percent initially expected by economists in the survey, which showed early optimism that three years of sluggish growth in the 2 percent area could be coming to an end. Some still hold out hope, with JPMorgan economists forecasting a 3.5 percent quarter, while Goldman Sachs economists see just 2.2 percent growth.
"You take a look at the environment and it's a slow-growth environment, but it's stable, and I think that's what some investors are really overlooking," said Charlie Ripley, investment strategist at Allianz Investment Management. Ripley expects 2.5 percent growth for the second quarter and a pace of 2.5 to 2.75 percent for the full year.
"Going into this year, there were some high expectations around fiscal stimulus, but our view since the beginning of the year is that some of this stuff is going to take a lot longer to play out, and we've seen that through most of this year. Congress isn't able to get much done in their current state, and it could be some time before we see meaningful fiscal reform or even tax cuts," Ripley said.
Second-quarter GDP is scheduled to be reported at 8:30 a.m. ET Friday, and will be revised two more times including with fresh consumer spending data, expected Tuesday.
The June durable goods orders showed a surprise jump of 6.5 percent from the month earlier, the best pace in almost three years.
But the headline number was made top heavy by aircraft orders, reflecting Boeing's success at the Paris Air Show. Businesses outside of transportation actually cut spending last month. The orders for nondefense capital goods, excluding aircraft, were down 0.1 percent, the first decline this year.
"The shipments were good with the upward revisions. Core durables were up 0.2 percent on shipments," said DS Economics CEO Diane Swonk. For May, the change in orders was revised up to 0.7 percent from 0.2 percent, while the change in shipments was revised to 0.4 percent from 0.1 percent.
The trade balance was also narrower than expected, at -$64 billion from -$66 billion, reducing the drag from trade in GDP.
Swonk said she upped her GDP forecast to 2.8 percent from 2.6 percent.
Wholesale inventories were up 0.6 percent, more than expected and rising from May's 0.4 percent. Retail inventories were up 0.5 percent.
"The hard part is knowing in the inventories how much is that a signal you take going forward," said Seth Carpenter, chief U.S. economist at UBS. "We're seeing it as neutral. There was an unintended draw that got rebuilt. ... We didn't have it spill over to the third quarter."
Other data expected Friday includes the second-quarter employment cost index at 8:30 a.m. ET and consumer sentiment at 10 a.m.
Correction: Consumer spending data is expected Tuesday. An earlier version misstated the day.