The economy expanded more than previously estimated in the third quarter, reflecting bigger gains in consumer spending and business investment, and capping the strongest six months of growth in a decade.
Gross domestic product, the value of all goods and services produced, rose at a 3.9% annualized rate, up from an initial estimate of 3.5%, Commerce Department figures showed Nov. 25. The median forecast of 81 economists surveyed by Bloomberg called for a 3.3% gain. After the 4.6% increase in the second quarter, it marked the biggest back-to-back advance since late 2003.
“We probably have more momentum heading into the final quarter of the year,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, whose estimate of 3.8% growth was closest in the Bloomberg survey. “We’re probably on pace for another 3% to 3.5% growth in the final three months.”
Economists’ GDP estimates in the Bloomberg survey ranged from 2.8% to 3.8%.
The report wasn’t universally positive. Revised data for the second quarter showed the previously estimated increase in wages and salaries was cut almost in half and corporate profits last quarter rose less than in the prior three months.
Consumer spending, which accounts for about 70% of the economy, grew at a 2.2% annualized rate in the third quarter compared with the previously estimated 1.8%. The improvement was spread across durable and nondurable goods, including recreational vehicles and restaurant meals.