The U.S. economy expanded even more than originally estimated in the third quarter, thwarting economists’ expectations that gross domestic product would be revised downward.
GDP, the total value of all goods and services produced nationally, grew at a 3.9% pace in the third quarter compared with an initial reading of 3.5%, according to the Bureau of Economic Analysis. Economists expected growth to be revised down to 3.3%, according to Bloomberg data.
The upward revision reveals more spending by consumers, as well as a smaller drop in private inventories.
The growth follows second quarter GDP that topped out at 4.6%, representing the strongest six months of growth in a decade. The back-to-back gains are the biggest since late 2003.
National economic growth supports the Federal Reserve’s recent decision to end its bond-buying program, though it is still monitoring progress carefully to determine the best time to raise interest rates.
Minutes from the Fed’s last meeting said the committee will continue to keep interest rates near zero for the foreseeable future. Any future rate increases would “depend on its assessment of actual and expected progress toward its objectives of maximum employment and 2% inflation.”