The U.S. economic growth rate has been revised upwards, showing faster growth of 3.1 percent in the three-month period ending in June. The revision exceeds the predictions of most private sector economists.

It is a significant improvement from the 2.4 percent rate reported last month. Economists say the rise paves the way for faster growth in the third and fourth quarters of this year.

The Commerce Department says a big factor in the revision was a 46 percent rise in defense spending, the biggest since the Korean War of the 1950s.

Martin Regalia, chief economist at the U.S. Chamber of Commerce, foresees continuing economic improvement in the months ahead.

"The numbers we are seeing in the monthly data coming in for the third quarter are significantly stronger than what many of us had expected," he said. "So, again, the retail sales numbers are good, the durable goods numbers are good, industrial production is good - on a monthly basis are up. All of these point to a better economy. The only number we have not seen yet, and it is perhaps the most important number, is job growth."

Even though the U.S. economy is nearly two years into the recovery from recession, there has been as yet no growth in jobs and the unemployment rate is above six percent. Most economists expect to see job growth later in the year.

The Bush administration is predicting three to four percent growth for the remainder of this year and into 2004. With the second-quarter gross-domestic-product revision, some private sector forecasters now say the U.S. economy could grow at more than a four percent rate next year.