The U.S. economy grew faster than expected in the third quarter of the year, expanding at a rate of 2.7 percent, according to the Commerce Department. The initial estimate put growth at 2.0 percent during the July through September period.
The increase in real Gross Domestic Product (GDP), the sum total of goods and services produced in the U.S., reflects increases in consumer spending, private inventory investment, federal government spending, residential fixed investment, and exports.
It's double the 1.3 percent growth rate recorded in the second quarter and the highest rate since the fourth quarter of 2011.
What exactly pushed growth higher? The Commerce Department reports sales of computers added 0.12 percentage point to the third-quarter change in real GDP after subtracting 0.10 percentage point from the second-quarter change. On the other hand, motor vehicle output subtracted 0.24 percentage point from the third-quarter change in real GDP after adding 0.20 percentage point to the second-quarter change.
Real personal consumption expenditures increased 1.4 percent in the third quarter, compared with an increase of 1.5 percent in the second. Durable goods -- things like washing machines and big screen TVs -- increased 8.7 percent, in contrast to a decrease of 0.2 percent in the previous quarter. Nondurable goods increased 1.1 percent, compared with an increase of 0.6 percent. Services increased 0.3 percent, compared with an increase of 2.1 percent.
Business spending also increased, recording a healthy $61.3 billion. That compares with $41.4 billion in business spending in the previous quarter.
The numbers might provide additional pressure on Congress and the White House to come to terms on an agreement to avoid the so-called “fiscal cliff” at the end of the year, when taxes are set to revert to the higher pre-2002 rates and major cuts in federal spending are scheduled to take effect. The Congressional Budget Office has reported that set of circumstances would likely trigger a recession in 2013.