U.S. Economy Grew 5% in Third Quarter, Its Fastest Rate in More Than a Decade

U.S. Economy Grew 5% in Third Quarter, Its Fastest Rate in More Than a Decade

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Shoppers at a Century 21 department store in Philadelphia. Higher consumer spending and business investment helped accelerate economic growth last quarter.By NELSON D. SCHWARTZDecember 23, 2014

The American economy grew last quarter at its fastest rate in more than a decade, bolstered by robust spending among consumers and businesses alike.

Over July, August and September, economic output rose at an annual rate of 5 percent, the Commerce Department said Tuesday, a huge revision from its earlier estimate of 3.9 percent.

The revision was led by an uptick in investment by businesses, a force for growth in most economic recoveries but one that has lagged until recently in the present one.

Higher consumer spending and a healthier trade balance also helped, with the 5 percent rise making the third quarter the strongest since the summer of 2003.

Although the growth rate is expected to decelerate somewhat in the current fourth quarter, the improved view in the rearview mirror corresponds with other, more recent evidence that the recovery is finally gaining sustained power more than five years after it began.