The U.S. economy grew at a much greater-than-expected pace in the third quarter, boosted by strong consumer spending, a delayed report released Tuesday showed.
U.S. GDP, a sum of all goods and services produced in the sprawling U.S. economy, expanded by 4.3% in the July-September period, the Commerce Department said in its initial reading of third-quarter growth. Economists polled by Dow Jones expect a gain of 3.2%.
Consumer spending expanded by 3.5% in the third quarter after rising 2.5% in the second quarter.
Increases in exports and government spending also boosted growth, while a smaller dip in private fixed investment helped as well.
The report originally had been scheduled for release on Oct. 30 but was delayed by the government shutdown. This release also replaces a second estimate that was set to drop on Nov. 26. The department’s Bureau of Economic Analysis will release one final estimate later.
A measure of growth called real final sales to private domestic purchasers rose 3% in the quarter, up 0.1 percentage point from the prior period. Federal Reserve policymakers watch the data point closely for signs of consumer demand.
The economy moved forward during the period despite persistent signs of inflation pressures.
The personal consumption expenditures price index, the Fed’s primary inflation gauge, rose 2.8% during the period, and 2.9% for core which excludes food and energy. Both were above prior respective readings of 2.1% and 2.6% and remain well above the Fed’s 2% inflation gauge. Also, the chain-weighted price index, which accounts for changes in consumer behavior such as switching less expensive products for pricier items, rose 3.8%, a full percentage point above the forecast.
Though the report presented a largely positive view of the economy, markets reacted little as the data is backward-looking. Stock futures were slightly negative while Treasury yields held higher.
Elsewhere in the report, corporate profits soared by $166.1 billion, or 4.2%, compared to a gain of $6.8 billion in the second quarter.
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