The US economy grew at five per cent in the third quarter, the fastest in more than a decade, due to strong job growth, increased domestic consumption and business investment, a government agency said today.
“The strong GDP growth is consistent with a broad range of other indicators showing improvement in the labour market, increasing domestic energy security and continued low health cost growth,” said Jason Furman, Chairman of Council of Economic Advisors.
“The steps that we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 already the strongest year for job growth since the 1990s,” he said in a statement as the American economy showed signs of revival and strong growth.
According to the report released by Bureau of Economic Analysis, a principal agency in United States Department of Commerce that provides important economic statistics; real gross domestic product (GDP) grew 5.0 per cent at an annual rate in the third quarter of 2014â€”the strongest single quarter since 2003.
While quarterly growth reports are volatile, and some of the growth in Q3 reflected transitory factors, the recent robust growth data indicate a solid underlying trend of recovery, Furman said.
Indeed, the strong growth recorded in each of the last two quarters suggests that the economy has bounced back strongly from the first-quarter decline in GDP, which largely reflected transitory factors like unusually severe winter weather and a sharp slowdown in inventory investment, he added.
Third-quarter real GDP growth was revised up 1. 1 percentage point from the second estimate released in November, the report said.
Most of the upward revisions were in personal consumption and business investment, the most persistent and stable components of GDP.
The contributions of consumer spending and business investment were revised up 0.7 and 0.2 percentage point, respectively, including increased contributions from health care and other services, nonresidential structures investment, and intellectual property investment.
An upward revision to inventory investment also accounted for 0.1 percentage point of the revision.