The vast U.S. economy grew at a sizzling annual rate of 3.9 percent from July through September, the Commerce Department said Tuesday in its second, fuller estimate of quarterly growth.
That fast rate of growth came on top of an even stronger 4.6 percent growth rate from April to June, and suggests, when taken with a falling unemployment rate and increased hiring, that the underlying strength of the economy is firming fast.
The first-blush estimate made by the BEA, which is based on incomplete data, had the economy growing at a rate of 3.5 percent from July through September. But for the second straight quarter, the second revision of the nation’s gross domestic product_ the sum of goods and services_ was sharply upwards.
“The large upward revision to third quarter GDP growth was a pleasant surprise, and the U.S. economy is growing at an above-trend pace, absorbing the slack still left in the economy after the Great Recession,” Gus Faucher, a senior economist for PNC Financial in Pittsburgh, said in a note to investors.
Personal consumption expenditures helped power third-quarter growth, said the report from the Bureau of Economic Analysis. It noted that gains came from “nonresidential fixed investment, federal government spending, exports, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from private inventory investment.”
Imports, which are a subtraction in the calculation of growth, decreased over the quarter.
“Growth was broad-based across most segments of the economy, including consumer spending,” Faucher said. “Inventories were a negative, but that bodes well for near-term growth as firms will need to restock their shelves.”