US economy grows 3.4% in third quarter, beating expectations
Investment, consumer spending and government outlays drive growth. Price pressures as measured by the PCE index ease markedly. Initial jobless claims fall.
Symbolic image · Photo: Carol M. Highsmith / Wikimedia Commons, Public domain (cropped and resized)
The U.S. economy grew at a 3.4% annual rate in the third quarter, according to the Bureau of Economic Analysis' (BEA) advance estimate. Growth in the second quarter was 2.2%, and economists had expected 3.2% on average. It is the strongest growth in a year; at a quarterly rate, output rose 0.8%.
Growth was driven by higher investment, consumer spending and government spending, partly offset by lower exports and higher imports. Investment was led by inventories and equipment, especially computers and other information processing equipment. Consumer spending rose in both services, led by health care and food services and accommodation, and goods, led by prescription drugs. Government spending increased mainly because of smaller crude oil sales from the Strategic Petroleum Reserve.
The personal consumption expenditures (PCE) price index rose at a 2.1% annual rate after 5.0% in the second quarter, while the core index excluding food and energy rose 2.5% after 3.3%. On the same day, the Labor Department reported that initial jobless claims fell by 1,000 to 194,000 in the prior week, below the 198,000 expected. The second estimate for the third quarter is due on Nov. 25.