The US economy grew at its fastest pace in 11 years in the third quarter, in the strongest sign yet that the world's biggest economy has shifted into higher gear.
The Commerce Department on Tuesday revised up its estimate of GDP growth to a 5pc annual pace from the 3.9pc rate reported last month, citing stronger consumer and business spending than it had previously factored in. It was the fastest growth pace since the third quarter of 2003. GDP growth has now been revised up by a total of 1.5 percentage points since the first estimate was published in October. The news sent the Dow Jones Industrial Average above 18,000 for the first time as it climbed as high as 18051.05. Big revisions to GDP data are not unusual as the government does not have full information when it makes its initial estimates.
The economy expanded at a 4.6pc rate in the second quarter. It has now experienced the two strongest back-to-back quarters of growth since 2003. Economists polled by Reuters had expected growth would be raised to a 4.3pc pace.
While the pace of growth likely slowed in the fourth quarter, a rapidly strengthening labor market and lower gasoline prices should provide the economy with sufficient momentum in 2015 and keep the Federal Reserve on course to start raising interest rates by the middle of next year.
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