The US economy grew at a faster pace than initially thought in the third quarter, with the GDP growth rate revised up on Thursday to its highest level in two years.
According to the US Commerce Department the economy grew at an annualised rate of 3.5 percent between July and September. This is the second time it has been revised, being boosted from its initial 2.9 percent reading to 3.2 percent.
Economists polled by Reuters had expected that third-quarter GDP growth would be revised up to 3.3 percent.
Strong consumer spending, which makes up about 70 percent of economic activity, boosted the figures and increased by 3 percent over the last quarter, up from a previous estimate was 2.8 percent estimate. A jump in soybean exports also had a positive impact, after a poor soy harvest in Argentina and Brazil.
Barclays Chief US economist Michael Gapen wrote in a note to clients: “Altogether, the third estimate of Q3 GDP paints a picture of a healthy consumer, likely fueled by ongoing gains in employment, modest increases in wages, and solid balance sheets.”
Spending on nonresidential structures increased at a 12.0 percent rate, the fastest pace since the first quarter of 2014.
Corporate spending on equipment decreased at a 4.5 percent annualized pace in the third quarter, compared with the 4.8 percent drag previously estimated, and subtracted 0.3 percentage point from growth.
“The relative boom of the US economy shows no signs of slowing down, with another strong set of GDP figures,” Dennis de Jong, managing director at UFX.com, told the BBC.
“[US Federal Reserve] chair Janet Yellen has already stated that another round of rate rises are on top of her to-do list for 2017.
“With the incoming president’s fiscal policy largely yet to take shape, a period of cautious optimism will likely remain for some time.”