Nov. 30, 2004
USATODAY
WASHINGTON (AP) — The economy — helped out by more brisk consumer and business spending — grew at an annual rate of 3.9% in the third quarter, a performance that was stronger than previously thought.
The reading on gross domestic product, which is based on additional data, was up from the 3.7% growth rate first estimated for the July-to-September quarter, the Commerce Department reported Tuesday.
GDP measures the value of all goods and services produced within the United States and is considered the broadest barometer of the economy's health.
The 3.9% growth rate registered in the third quarter represented a pickup from the second quarter's 3.3% pace and marked the best showing since the opening quarter of this year.
The latest snapshot of economic activity was brighter than economists were expecting. They were predicting economic growth would hold steady at the previously estimated pace of 3.7%.
The main reasons for the third-quarter improvement: stronger consumer spending, which grew at the fastest clip since the end of 2001, and more robust business investment in equipment and software. Better growth in U.S. exports also helped.
A key price gauge favored by Federal Reserve Chairman Alan Greenspan — the personal consumption expenditure index excluding food and energy costs — rose at a mild 0.7% rate in the third quarter, the smallest pickup in more than four decades.
Fed policymakers next meet Dec. 14 to mull interest-rate strategy. They have lifted short-term borrowing costs at each of their last four gatherings and many economists expect another increase from a still-low 2% federal funds rate to come in December.
Contributing: Reuters
Copyright 2004 The Associated Press.
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