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US Economy Grows Faster Than Expected

Board above trading floor of the New York Stock Exchange shows closing number for the Dow Jones industrial average, Dec. 18, 2013.
Board above trading floor of the New York Stock Exchange shows closing number for the Dow Jones industrial average, Dec. 18, 2013.
VOA News
The U.S. economy advanced at a healthy 4.1 percent pace in the July-to-September period, stronger growth than the government first estimated.
 
The Commerce Department said Friday that consumer spending, which accounts for 70 percent of the country's economy, grew faster in the third quarter than previously believed. It said American households bought more big-ticket items such as refrigerators, while also spending more on daily services and healthcare.
 
The July-to-September advance is the fastest in two years and the second biggest since the country's steep recession officially ended in mid-2009.
 
The government had previously estimated third-quarter growth would be 3.6 percent, already well above the 2.5-percent growth seen in the second quarter.
 
Economist Mark Vitner at Wells Fargo Bank says forecasters are optimistic that the U.S. economy will continue to advance in 2014.
 
"Expectations for 2014 are being increased. Our own forecast is around 2.5 percent," said Vitner. "We're more optimistic — and I think many forecasters are more optimistic — about the economy going into 2014 than we've been at any other time since the recession ended."
 
With the steady advance of the world's largest economy, policy makers at the U.S. central bank, the Federal Reserve, this week agreed to start trimming their direct support of the American economy. For more than a year, the Fed has pumped $85 billion a month into the economy with its purchase of securities, but starting next month it will cut that figure to $75 billion.
 
Since the central bank started the asset purchases, the U.S. has added nearly three million jobs to its labor market and the jobless rate has fallen to 7 percent. Stock indexes on major on New York exchanges are at near record levels.

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