The U.S. economy expanded in the third quarter at a faster rate than previously estimated as consumers stepped up spending on services such as health care and companies invested more in software.
Gross domestic product climbed at a 4.1 percent annualized rate, the strongest since the final three months of 2011 and up from a previous estimate of 3.6 percent, Commerce Department figures showed today in Washington. The median forecast of 72 economists surveyed by Bloomberg projected a 3.6 percent pace after 2.5 percent in the second quarter.
Inventories accounted for a third of the gain in GDP in the third quarter, showing companies were confident about the prospects for demand. Stronger retail sales in October and November underscore the Federal Reserve’s view that the world’s largest economy is improving.
“The wealth effects resulting from rising equities and house prices are being reinforced by improving conditions in labor markets, which is leading to pretty healthy gains in wages and salaries,” said Ben Herzon, a St. Louis-based economist at Macroeconomic Advisers LLC. “All of that is coming together to create accelerating private domestic demand, which bodes well for GDP growth heading into next year.”