US economic growth accelerated to a 3.1% annual pace in the July-September quarter, the US government said this afternoon, driven by brisk demand for cars.
Growth picked up sharply from the second quarter figure of 1.3%, the preliminary Commerce Department report showed. But the rate of expansion was slightly below most analysts' expectations.
Economists are forecasting a dip in growth in the last quarter of the year, however, fuelling speculation that Federal Reserve chairman Alan Greenspan may cut interest rates next week.
The policy-making Federal Open Market Committee meets on Wednesday, a day after congressional elections, to decide whether to lower the federal funds target rate, already at a 40-year low of 1.75%.
Any sign of weakness in October unemployment figures scheduled for release on Friday is expected to nudge the Fed towards cutting interest rates.
Consumer spending was the engine behind growth in the third quarter, with personal consumption expenditure surging 4.2% as people snapped up new cars, lured by zero-interest financing offers.
