In the first estimate of gross domestic product (GDP) for the period, the Commerce Department said growth picked up after a tepid 0.6 percent rate, revised downward from 0.7 percent, in the first quarter for the world's biggest economy.

The 3.4 percent second-quarter rate was the strongest since the first quarter of 2006 and slightly ahead of the average Wall Street estimate of 3.2 percent.

Avery Shenfeld, senior economist at CIBC World Markets, said that the US economy is "neither as weak as it looked in the first quarter nor as strong as it appeared in the second quarter.

"If you put the first two quarters together, you're looking at growth of around two percent, and that's probably what the second half will look like."

"With energy prices high, the housing market reeling and the stock market uncertain, is there really a reason to think growth will accelerate sharply? Where will it come from?" said Joel Naroff of Naroff Economic Advisors. "I don't see it, even if the Fed does."

The higher growth rate came from an improving global trade picture, including higher exports, while consumer spending cooled.

Exports grew 6.4 percent while imports fell 2.6 percent, amid sharp declines in the US dollar.

Consumer spending, which accounts for two-thirds of economic activity, remained a driver of the expansion, but was a lesser factor. Spending increased just 1.3 percent, the weakest since late 2005, compared with 3.7 percent in the first quarter.

The housing slowdown was much less of a drag on the economy in the second quarter, as real residential fixed investment fell 9.3 percent, not as steep as the 16.3 percent drop in the first quarter.

"The big risk now is what kind of impact we have from housing in the second half of this year," noted Drew Matus, economist at Lehman Brothers.

"Clearly the risks are that we get weaker housing than we were expecting ... we're still on shaky ground in terms of growth of the US economy, but we're not in danger of stalling."

Inflation figures were mixed. The personal consumption expenditure (PCE) price index linked to GDP showed a 4.3 percent pace of increase.

But the "core" rate of inflation, preferred by the Federal Reserve, rose 1.4 percent in the second quarter, down sharply from the 2.4 percent rise in the prior quarter and the slowest pace since the second quarter of 2003.