US economy grew at 3.2 percent in Q3
By Martin Crutsinger, AP
November 30, 2016, 12:27 am TWN
WASHINGTON--The U.S. economy in the third quarter grew at the fastest pace in two years, with a revised report showing stronger consumer spending than first estimated.
The gross domestic product, the country's total output of goods and services, expanded at an annual rate of 3.2 percent in the July-September period, the Commerce Department reported Tuesday. That is up from a previous estimate of 2.9 percent.
The revision was significantly better than the meager gains of 0.8 percent in the first quarter and 1.4 percent in the second quarter when the economy was being held back by a strong U.S. dollar and weak business investment.
The 3.2 percent increase was expected to be the best showing for the year. Economists believe growth has slowed to around 2 percent in the current quarter.
The latest look at GDP, the second of three estimates from the government, showed that consumer spending grew at a 2.8 percent rate in the third quarter, better than the 2.1 percent advance first estimated. The new-found strength reflected more spending than initially thought in such areas as auto purchases and utility bills. Still, consumer spending, which accounts for 70 percent of economic activity, slowed from a gain of 4.3 percent in the second quarter.
Other areas of strength were in export sales, which grew at a 10.1 percent rate. Although the figure partially reflected a temporary surge in exports of soybeans, economists are hopeful that exports will show further gains in the months ahead. Earlier in the year, American manufacturers were battered by a strong U.S. dollar which made their goods more expensive on overseas markets.
The 3.2 percent overall GDP gain, the best showing since a 5 percent advance in the third quarter of 2014, is not expected to last. Analysts believe growth will slow to a still-solid 2 percent rate in the current quarter as a temporary boost from business restocking of store shelves fades. The swing in inventories added 0.5 percentage point to growth in the third quarter, while the improvement in trade added 0.9 percentage point to growth.
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