The U.S. economy expanded in the third quarter at its most robust pace in two years, catapulted by stronger consumer spending and business investment than previously reported, according to newly revised government figures.
The Gross Domestic Product climbed at a 4.1 percent annual rate from July through September, the U.S. Commerce Department reported today.Consumer spending, the main driver of the U.S. economy, rose 2 percent.
“The increase in real GDP in the third quarter primarily reflected positive contributions from private inventory investment, PCE (personal consumption expenditures), nonresidential fixed investment, exports, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending,” the Commerce Department stated.
“The U.S. economy entered the fourth quarter with more momentum than had previously been thought to be the case, and we expect that momentum to build further in 2014,” Richard Moody, chief economist of Regions Financial Corp., told MarketWatch.com.
“You have equity markets supporting household net worth, rising home values and also payroll gains and falling unemployment, so we do really look for consumption to start picking up,” Robert Rosener, associate economist at Credit Agricole CIB in New York, told Bloomberg.com. “This is a very good sign for momentum going into the fourth quarter.”
Today’s GDP report prompted the U.S. stock market to build upon its recent record highs. The Dow Jones Industrial Average gained more than 90 points this morning.
The largest local gainers today were ManpowerGroup (up $1.49 to $84.99) and Quad/Graphics Inc. (up 92 cents to $26.25).