In a separate report, US home prices rose 5.5 per cent in the year to September, meaning house prices overall have now fully recovered from their plunge during the 2008 financial crisis.
A third report showed US consumer confidence rebounded in November to its highest level in nine years despite uncertainty surrounding the policies of President-elect Trump.
US stock prices edged higher on Tuesday after the data, with the benchmark S&P 500 index now up about 6.0 per cent since the Nov. 8 elections. US Treasury yields ended slightly lower on Tuesday but the benchmark ten year note yield has risen about 0.5 percent in the past two weeks, helping to push the US dollar up to its highest levels in more than a decade against major currencies.
US economic growth fastest since 2014
US gross domestic product (GDP) increased at a 3.2 per cent annual rate instead of the previously reported 2.9 per cent pace, the Commerce Department said in its second GDP estimate on Tuesday. Economists had forecast third-quarter GDP growth being revised up to a 3.0 per cent rate.
Growth was the strongest since the third quarter of 2014 and followed the second quarter’s anemic 1.4 per cent pace. Output was lifted by upward revisions to business investment and home building.
Exports grew at their quickest pace since the fourth quarter of 2013, driven by a surge in soybean exports after a poor soya harvest in Argentina and Brazil. International trade contributed 0.87 percentage point to GDP growth and not 0.83 percentage point as reported last month.
Data ranging from housing to retail sales and manufacturing output also suggest the economy retained its momentum early in the fourth quarter even as exports appear to be faltering amid a reversal of the boost to growth provided by soybean exports in the third quarter.
The Atlanta Fed is currently forecasting GDP rising at a 3.6 per cent rate in the fourth quarter, supporting market expectations that the Federal Reserve will raise interest rates next month.
Economic growth could also be supported next year if President-elect Donald Trump succeeds in pushing through Congress a fiscal stimulus plan that includes massive infrastructure spending and tax cuts, analysts said.
“Couple that with an increasingly enthusiastic consumer supported by stronger wage gains and the economy appears well-positioned to remain on a growth path heading into 2017,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.
When measured from the income side (GDI), the economy grew at a 5.2 per cent clip amid a rebound in corporate profits. That was the fastest pace of increase in gross domestic income in nearly two years and followed a 0.7 per cent rate of expansion in the second quarter.
The average of GDP and GDI, which economists consider to be a more accurate measure of current economic growth and a better predictor of future output, increased at a 4.2 per cent rate in the third quarter, the fastest pace in two years.
That followed a 1.1 per cent rate of increase in the second quarter and likely exaggerates the economy’s strength.
Rest at http://timesofoman.com/article/97615/Business/Consumers-exports-give-US-economy-muscle-in-the-third-quarter
