The U.S. economy grew faster than previously estimate in the third quarter, boosted by strong consumers spending and higher exports. Gross domestic product rose at a 3.2 percent annualized rate in the third quarter, the Commerce Department said on Tuesday. This is the second GDP estimate and its better than the previously estimate of 2.9 percent pace. This also marks the strongest growth pace since the second quarter of 2014. Economists had projected that third-quarter GDP growth rate would be 3 percent.
“Growth is going to remain heavily reliant on the consumer, but consumers are in very good position to lead that charge,” senior economist at Ameriprise Financial Inc. in Detroit. “Overall, it’s an encouraging sign for the path ahead.”
Strong consumer spending and stable labor market helped bolster the economic growth in the quarter ended September. Consumer spending, which accounts for more than two-thirds of U.S. GDP, rose 2.8 percent in the quarter, stronger than the initial estimate of 2.1 percent. Consumers have more money to spend as wages and salaries increased at an annual 6.7 percent.
After-tax corporate profits jumped 7.6 percent in the third quarter, compared with a 1.9 percent decline in the second quarter. The strong economic data further support the case that Federal Reserve to increase interest rates in December.