Business

US third quarter growth highest in 11 years

WASHINGTON: US growth surged to its highest level in 11 years in the third quarter, according to an updated government estimate released Tuesday.

Gross domestic product (GDP) increased five percent between July and September in the Commerce Department’s third estimate for the period, up from the 3.9 percent previously estimated.

Analysts had expected growth of 4.3 percent.

Tuesday’s figures built on the momentum from the second quarter, when growth came in at 4.6 percent.

The US economy contracted 2.1 percent in the first quarter of 2014, a weak result mainly attributed to the abnormally cold winter, but has since recovered strongly.

Spending for consumption rose 3.2 percent, the biggest jump since the end of 2013. Consumption of goods rose 4.7 percent, while spending on services gained 2.5 percent.

The updated figures come on the heels of a strong November jobs report, which showed the US economy adding 321,000 jobs.

Federal Reserve Chair Janet Yellen last week said the US economy is improving steadily, but said the labor market still needs to strengthen and signalled that interest rates would remain low for months.

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