Washington, DC, United States (4E) – The U.S. economy grew at a much faster rate than previously predicted in the third quarter, amid worries of a “fiscal cliff” taking effect next year and the effects of superstorm Sandy slowing growth in the final months of the year.
In a report released by the Commerce Department on Thursday in Washington, the country’s gross domestic product (GDP) expanded by an annualized rate of 3.1 per cent in the three months ending September, higher than the previous estimate of a 2.7 per cent advance. In a survey by economists, the median estimate calls for a 2.8 per cent gain.
The latest figure also shows that the economy grew at a much faster rate compared to the 1.3 per cent rise in the second quarter.
The Commerce Department report said that the latest reading does not change the general picture of the overall economy for the quarter. It did show modest rise in consumer spending and lower import activity.
The latest data shows consumer spending is on the rise at a rate of 1.6 per cent during the period, slightly better than the 1.4 per cent previously estimated, primarily because of higher spending on healthcare.
As global demand weakens and local firms holding off spending and hiring because of the looming tax hikes and budget cuts in 2013, the world’s largest economy may find it difficult to maintain that growth rate in the fourth quarter.
The Federal Reserve is seeking to boost economic activity and drive down unemployment by pushing for record stimulus.