The US economy raced ahead at annual pace of 4% in the third quarter, far faster than first thought, revised government figures showed today.
The third quarter growth rate, which compared to a 1.3% expansion in the second quarter, was much higher than the first estimate of 3.1% growth, the Commerce Department said.
The key revisions were - companies increased their inventories, or stockpiles, by $15.5 billion in the three months, dramatically higher than the first estimate of a $1.9 billion increase, final sales rose 3.5%, up from the first estimate of a 3.2% increase and government spending climbed 3.1%, up from the previous estimate of a 1.8% increase.
Economists noted that the US economy had expanded 5% in the first quarter, 1.3% in the second quarter and now 4% in the third quarter.
'This is not a booming economy but we did not have a collapsing recession. So when you put it all together we are really not far off where we normally would be when we just look at levels of GDP,' one economist said.
But the weakness was confined mostly to business investment in structures, with impovements even in purchases of equipment and software during the third quarter. Business fixed investment fell 0.7%, with spending on structures such as factories and commercial property plunging 20.6% in the third quarter.
But spending on equipment and software rose at a revised 6.6% pace in the period. Consumer spending climbed 4.1% in the quarter, with expenditure on durable goods such as cars leaping 23.1%.
