Consumer spending helps boost US growth

The US economy has grown much faster in the third quarter than first thought, marking the strongest two consecutive quarters for a decade.

Figures show the economy expanded at an annualised rate of 3.9 percent, up from the 3.5 percent reported last month.

Consumer spending was the biggest driver. It is closely monitored as it accounts for more than two-thirds of US gross domestic product.

There was a stronger pace of spending on equipment than previously thought with the growth in business investment raised to 7.1 percent from 5.5 percent. Businesses accumulated seventy-nine billion dollars worth of inventories in the third quarter rather than the sixty-two which had been previously reported.

But export growth was lowered to a 4.9 percent rate – down from 7.8 percent while imports were raised. Spending on residential construction was also up which helped to offset the downward revision to exports and also to government spending.

The data which ranged from manufacturing to employment and retail sales suggests the economy retained some of the momentum into the fourth quarter. Estimates for growth for the final three months are running just below the three percent rate.