Photo: U.S. Economy
The U.S. economy expanded 4.1 percent in the third quarter, the fastest clip in two years, the Commerce Department said Friday in a revised estimate of the nation’s gross domestic product.
In a reading earlier this month, the government had said GDP grew at an annual rate of 3.6 percent.
Consumer spending, which accounts for more than two-thirds of U.S. GDP, rose 2 percent between July and September as opposed to a preliminary estimate of 1.4 percent
Spending on services contributed 0.32 percentage points to economic growth in the third quarter, up from 0.02 percentage points in the previous estimate.
In addition to a significant increase in health-care spending, U.S. consumers spent more on recreation services, the report said.
Another main factor in third-quarter GDP growth was an increase in business inventories, which totaled $115.7 billion in a sign of companies’ confidence in consumer demand.
Export growth came in at 3.9 percent, up from 3.7 percent in the earlier estimate, while import growth was lowered from 2.7 percent to 2.4 percent.
At the end of its last meeting of 2013, the Federal Reserve’s Federal Open Market Committee said it would begin reducing its massive monetary stimulus program in January due to signs of a healthy economic recovery.
The Fed is now projecting 2013 GDP growth of between 2.2 percent and 2.3 percent, as opposed to between 2 percent and 2.3 percent in September.
It said it expects the economy to grow between 2.8 percent and 3.2 percent in 2014, compared to a September estimate of between 2.9 percent and 3.1 percent growth.