MW: U.S. GDP growth revised up to 3.5% rate in third quarter
The U.S. economy grew faster than previously thought, showing its best performance in two years, buoyed by stronger consumer spending, the government reported Thursday.
The Commerce Department said the economy expanded at a 3.5% annualized rate in the third quarter. This is above the government’s prior estimate of 3.2% due to upward revisions in consumer spending and business investment.
Growth in the third quarter was the strongest since the third quarter of 2014, the government said.
Economists polled by MarketWatch had expected GDP to be revised to growth of 3.3%.
The economy expanded 1.4% annualized rate in the second quarter and at a 0.8% pace in the first quarter. The figures are seasonally adjusted and adjusted for price changes.
Consumer spending, which added 2 percentage points to GDP, rose at a 3% annual rate, up from the prior estimate of 2.8%.
Business investments rose at a revised 1.4% rate, much stronger than the previous estimate of a 0.1% rise.
Looking forward, economists at MarketWatch expect growth to decelerate to a 2.4% rate in the fourth quarter.
And a survey of 42 economists conducted by the Philadelphia Fed forecast 2.2% growth in each of the four quarters of 2017.
Some economists think the economy may get a lift from the Trump administration’s plans for tax cuts and less regulation. Financial markets DJIA, -0.16% seem to be anticipating faster growth.
But others are more skeptical.
“We have seen similar bursts of optimism in this expansion’s past that were partially reversed before too long,” said Scott Anderson, chief economist at Bank of the West.
“Many of our country’s long-term economic problems from slowing productivity growth, an aging population, crumbling infrastructure, and rising national debt will be with us no matter who holds the White House or controls Congress -- and those problems can’t be tweeted away,” he said.
