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November 27, 2014

Significant Growth in Third Quarter for U.S. Economy

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Significant Growth in Third Quarter for U.S. Economy

U.S. consumers are spending more and boosting the economy at the same time that businesses are investing less and weighing down growth.

Gross domestic product grew at an annual rate of 3.1 percent from July to September, more than double the 1.3 percent rate in the second quarter, said the U.S. Commerce Department.  The government had originally estimated the economy grew only 2 percent in the third quarter.

Consumer spending was the largest driver of that growth, with more motor vehicle purchases and health care service spending, raising the annual consumer spending rate to 1.6 percent. Another large economic driver was government defense spending, which rose 12.9 percent in the third quarter. Home sales also contributed to the economic growth.

Yet business spending was down in the third quarter, with an annual rate of 1.8 percent. The largest cuts to business spending were on equipment and software.

Source: "U.S. Economy Grew Faster in Third Quarter" CNNMoney (12/20/12)

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