U.S. Economy Grows with Exports and Spending
The world’s largest economy grew faster in the third quarter than initially estimated, making this the strongest six months in a decade. The Bureau of Economic Analysis is now reporting that third quarter GDP growth was actually 3.9 percent annualized --- up 40 basis points from the "advance" estimate published last month.
The BEA cites positive contributions from net exports (total exports less imports) as an important factor in the revision. Real exports of goods and services increased 4.9 percent in the third quarter while real imports of goods and services decreased 0.7 percent.
Consumer spending, accounting for nearly 70 percent of the economy, grew at a 2.2 percent annualized rate in the third quarter compared with the previous advance estimate of 1.8 percent. While the Conference Board's consumer confidence index fell to 88.7 this month from an October reading of 94.1, October 2014 was the strongest seen since October 2007.
The weekly Bloomberg Consumer Comfort Index rose to the highest level since December 2007 as Americans grew more upbeat about the state of the economy, their financial well-being and the buying climate.
“The data today really bode well for 2015,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, who projected consumer spending would be revised up. “Businesses have a pretty good reading on consumer demand for their goods and services. They would not be ordering additional equipment if they did not think the consumer was going to be there down the road for them.”
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Next release -- December 23, 2014 at 8:30 A.M. EST for:
Gross Domestic Product: Third Quarter 2014 (Third Estimate)
Corporate Profits: Third Quarter 2014 (Revised Estimate)