The Bureau of Economic Analysis (BEA) released revised estimates yesterday that showed that the US Economy grew 5% between July and September (Q3). That’s the strongest growth that we’ve seen since the same time period in 2003.
The revised GDP estimates, which have been called “amazing” by MSNBC and “sizzling” by the Associated Press, follow the release of a train of strong economic indicators in the past few weeks. From the strong November employment report (313,000 jobs added) to surging Q3 retail spending, it’s starting to look like the US economy is really in the middle of a recovery, even as other world economies are starting to falter.
The BEA releases GDP statistics three times — one initial estimate and two revisions — for each quarter. Big revisions, such as this one (up from 3.9% last month), are not all that uncommon, as the Bureau’s original releases are based on incomplete data. This latest revision was driven primarily by huge increases in consumer spending and business investment.
Experts agree that Q4 (end of the year) spending estimates will likely be less impressive than these new numbers. The Federal Reserve, for instance, is projecting growth of 2.3% to 2.4%. However, even with lower numbers, the economy will likely continue to grow well into the New Year due to increased employment and lower gas prices.
The stock market has already reacted favorably to the news, with the Dow Jones breaking 18,000 points for the first time in history.
For more information, head over to MarketWatch. The Guardian is also live-streaming updates on the revision and ensuing reactions.
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