US Economy Expands 5% in Q3, Best Since 1990s

MOSCOW, December 25 (Sputnik) – According to a third estimate by the US Department of Commerce’s Bureau of Economic Analysis, US GDP grew 5% in the third quarter, as compared to last month’s second estimate of 3.9%. The revision comes after a larger amount of macroeconomic data became available for analysis, mainly consumption expenditures and foreign fixed investment.

The US economy accelerated to a 5% growth in the third quarter this year, according to a revised estimate by the Bureau of Economic Analysis. As America’s GDP growth reached 4.6% in the previous quarter, this past half-year marks the quickest pace of economic growth in the US since the prosperity of the 1990s.

Real GDP increased in Q3 due to a decline in imports, driven by the shale oil boom, as well as by an increase in governmental spending; mostly defense spending. Consumer expenditures and fixed non-residential investments were also strong, driving GDP up. Q3 inflation, however, slowed to a moderate 1.4% as compared to 2% in Q2. Consumer spending rose 3.2% in Q3 despite slowing inflation.

Foreign fixed investment added 8.9% in Q3, compared with a hike of 9.7% in Q2. Real exports rose 4.5% in Q3 (11.1% in Q2). Federal spending rose 9.9% in Q3 (-0.9% in Q2). Real final sales rose by 5% in Q3 (3.2% in Q2).

Corporate profits added only $64.5 bln in Q3 as compared with an increase of $164.1 bln in Q2.

 However, employment data have been strong during Q3, contributing to an overall more optimistic GDP estimate. First estimates of GDP expansion in Q4 will be released by the BEA in late January 2015.