As the country headed into the last weekend before the Christmas break, the federal government announced that the gross domestic product in the third quarter grew at a faster rate than first reported.
The economy expanded in the third quarter at a 4.1% annualized rate, higher than the 3.6% first reported, according to the U.S. Department of Commerce. That’s the fastest rate in almost two years.
A third of the increase could be attributed to gains in company inventories, which indicates that purchasing managers and company executives have reason to believe that 2014 will see higher consumer demand, according to an article from Bloomberg.
“You have equity markets supporting household net worth, rising home values and also payroll gains and falling unemployment, so we do really look for consumption to start picking up,” Robert Rosener, associate economist at Credit Agricole CIB in New York, told Bloomberg. ”This is a very good sign for momentum going into the fourth quarter.”
The median forecast from economists called for a 3.6% gain.
The Commerce Department reported that consumer spending increased by 2% in the third quarter of 2013, which ran from July to September. Spending increased particularly in healthcare and recreational services.
Most economists believe that the pace of growth will slow in the fourth quarter as companies slow down building up inventory. Whether they continue to invest in inventory will be a good indicator of whether they believe the economy is going to continue to expand at its current pace, according to the Bloomberg article.
Some areas of the country are experiencing better economic gains than others. In Texas, for example, the unemployment rate in November is almost a full percentage point lower than the country. At 6.1%, the rate is the lowest it has been in Texas in five years. It is also the fourth straight month that the rate has fallen.
Areas of the state associated strongly with the energy industry were especially doing well, with Midland having an unemployment rate of just 2.9% and Odessa at 3.5%, according to an article from Businessweek.
“We’ve been the national epicenter for all kinds of job creation for over a decade, and all indications are that won’t change anytime soon,” Gov. Rick Perry said in a statement.
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