U.S. Economy Grew 3.1% Last Quarter, More Than Forecast [View all]

[Purveyor]

The U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported, reflecting the first gain in state and local government spending in three years, more consumer purchases and a smaller trade gap.

The revised gross domestic product reading exceeded the highest projection in a Bloomberg survey and compared with a previously estimated 2.7 percent gain, according to Commerce Department figures released today in Washington. The median estimate of economists called for a 2.8 percent advance.

The world’s largest economy will be hard-pressed to maintain that pace of growth this quarter as global demand cools and companies limit spending and hiring ahead of looming tax increases and spending cuts. While a stronger housing market will provide some cushion, the Federal Reserve is pursuing record stimulus aimed at driving bigger gains for the expansion.

“We’re going to have some weakness closing out this year and starting off next year,” said Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “We really want to see business investment coming back because, ultimately, that’s going to lead to hiring.”

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http://www.bloomberg.com/news/2012-12-20/u-s-economy-grew-3-1-in-third-quarter-more-than-forecast.html