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US Economy Grew Faster in Third Quarter Then Earlier Reported - 2002-11-27

The U.S. economy grew faster than first reported in the July to September period.

The economy registered four percent growth in the third quarter. Earlier the Commerce Department reported third quarter growth of 3.1 percent. Growth was a sluggish 1.5 percent in the second quarter.

Jim Smith, an economist at the University of North Carolina business school, is not surprised with the upward revision in third quarter growth. "There was good news on corporate profits in the data today, 12 percent above a year ago. That should certainly get companies thinking about investing a little more. And many other good things are going on as well. So I think the fourth quarter will be surprisingly good and next year will be a much better year than most people currently anticipate," he said.

Not all forecasters share Mr. Smith's optimism. The National Association for Business Economics (NABE) says business will grow more slowly over the next six months than was anticipated just eight weeks ago. The NABE forecasts economic growth of 1.4 percent over the next six months.

Economists say the U.S. economy emerged from recession in the fourth quarter of 2001. However growth has been uneven, prompting the central bank to again cut interest rates at the beginning of this month. Consumer confidence this month rebounded from a nine-year low set in October. But the increase in the confidence index of the Conference Board was smaller than had been anticipated.