The path for a near rate hike just got a lot easier.
U.S. GDP grew at an annualized rate of 2.9% in the third quarter, the fastest in 2-years, according to the advance estimate released on Friday.
Economists had forecast that the value of everything the US produced and provided a service for increased by 2.6%, turns out it is much higher.
The boost to US growth came from a jump in inventories and exports. Business investment in equipment, however, contracted for a fourth straight quarter.
Because this is an advance estimate based on incomplete data, it will be revised two more times this year, and could still be adjusted in annual revisions next year.
Personal consumption, the key driver of growth, slowed to 2.1%. It had been estimated to slump to 2.6%. Some economists expect consumption growth to slow even more if inflation creeps up and eats into real income.
The better than expected data may bring the Fed to a conclusion that the U.S. economy is strong enough for another interest rate rise in December.
