U.S. economy picks up speed
NEW YORK -- The U.S. economy grew at a faster pace in the third quarter than originally reported, another sign that the recovery is picking up speed.
Gross domestic product, the broadest measure of the nation's economic health, was revised up to 3.9% in the July through September period. Economists had expected the growth rate to be cut from the original 3.5% reading. Both consumer spending and business investment showed greater strength.
Growth in the third quarter was slower than the previous quarter's rate of 4.6%, but that was a rebound from a steep first quarter decline that was blamed bad weather. The combined growth in the second and third quarters represented the best six months for the economy since 2003.
The strength of the economy has been evident in other closely watched measures as well, including a gain in hiring and a corresponding decline in the unemployment rate, record levels for U.S. stocks, strong auto sales and continued gains in home prices.
"We're moving forward at a fairly steady pace," said Keith Hembre, chief economist at Nuveen Asset Management. And the U.S. is outpacing many other major economies in Europe and Asia.
But despite the signs of improvement, many Americans remained worried about the economy and their personal economic outlook. Hembre said that disconnect is because a large percentage of the public has yet to benefit from the recovery.
Disposable personal income is only up 2.3%, according to Tuesday's report, and was revised lower. Meanwhile Hembre points out that the report shows that corporate profits accounted for more than 10% of the nation's GDP, near the record high reached late last year.