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US Economy Gains Speed but Remains Modest

  • Jim Randle

FILE - A shopper is seen through a window on display at a Lowe's store in Atlanta. The U.S. economy grew at the fastest pace in two years in Q3 2016, driven by businesses making purchases to restock shelves and rising exports.

FILE - A shopper is seen through a window on display at a Lowe's store in Atlanta. The U.S. economy grew at the fastest pace in two years in Q3 2016, driven by businesses making purchases to restock shelves and rising exports.

The U.S. economy grew at the fastest pace in two years in July, August, and September.

The 2.9 percent annual growth rate in the third quarter accelerated at a more rapid pace than the previous quarter, according to Friday's report from the Commerce Department.

The data show the rebound was driven by rising exports and businesses making purchases to restock shelves.

White House economic adviser Jason Furman says exports have been hampered by slow growth overseas. Consumer spending, which drives most U.S. economic activity, moderated slightly.

Annual Quarterly Change in U.S. GDP

Annual Quarterly Change in U.S. GDP



Key campaign issue

Economic growth and jobs have been major issues in the presidential campaign, and most voting takes place on November 8, a bit more than a week from Friday.

Economists say the relatively positive economic report makes it more likely that the U.S. central bank will raise interest rates. The Federal Reserve slashed interest rates to ultra-low levels during the recession to boost economic growth, but many experts now say the recovering economy no longer needs such help.

Top Fed officials meet next week to debate where to set interest rates, though experts at PNC Bank say the Fed is "unlikely" to act so close to the election.

Economists at Wells Fargo Bank say they still expect a modest interest rate hike in December.

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