Business

US economic growth revised up for third quarter

Consumer spending lifted the US economy in the third quarter Image copyright Getty Images
Image caption Consumer spending accounts for more than two-thirds of US GDP

Strong consumer spending helped the US economy to grow faster than previously estimated in the third quarter.

The world's largest economy grew at an annualised rate of 3.2% in the three months to September, up from an earlier estimate of 2.9%.

The figure outstrips the second quarter growth rate of 1.4%, and was above economists' estimates of 3% growth.

The Commerce Department said the rate of growth was the strongest since the third quarter of 2014.

The strong growth may give further impetus to the Federal Reserve to raise US interest rates when it meets in the middle of next month.

A strong employment rate and steadily rising inflation may mean the the central bank is comfortable raising rates at the meeting on 13 and 14 December.

The Fed hiked its overnight benchmark interest rate last December for the first time in nearly a decade.

The GDP figure is a measure of the goods and services produced across the US economy.

The Commerce Department said: "The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures, exports, private inventory investment, and federal government spending, that were partly offset by negative contributions from residential fixed investment and state and local government spending."

It said consumer spending, which accounts for more than two-thirds of the US economy increased at a rate of 2.8%, compared with the initial estimate of 2.1%.

But business spending on equipment fell at a steeper 4.8% rate, instead of the previously reported 2.7%.

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