The United States economy grew at a 5% clip in the third quarter, the strongest rate since 2003, as economic indicators continued to show signs of revitalization.
The number was revised up from a previously announced 3.9% by the Commerce Department on Tuesday after more complete data showed that spending by consumers and businesses turned out to be higher than originally believed. This marked the second revision for the number, which was originally announced at 3.5% in October.
The news boosted the Dow Jones Industrial Average over 18,000 for the first time. According to Bloomberg, it continued a hot streak for the market this year that has seen “the fifth-fastest trip between thousands” in its history. That’s perhaps even more impressive given that the Dow had to make up 1,882 points to get there after dipping to a low point in mid-October. It hit 17,000 back in early July.
Meanwhile, the Thomas Reuters/University of Michigan finalized its December reading of consumer sentiment at 93.6. That marks the best number since 2007 as consumers are feeling the benefits of a growing economy, better job market, and falling gasoline prices.
“Consumers held the most favorable long-term prospects for the national economy in the past decade,” survey director Richard Curtin told Reuters. “Importantly, the 2014 gains in jobs and wages were widespread across all population subgroups and regions.”
While some indicators, including business investment, are slowing as the year winds down, that bolstered consumer confidence should help drive continued growth into 2015.
“We are the locomotive of growth for the world right now,” Nationwide Insurance chief economist David Berson told Bloomberg.
And Chris Rupkey of Bank of Tokyo-Mitsubishi described a veritable boom to Business Insider:
The consumer was spending an enormous amount through September before they got their gasoline price tax cuts. No wonder consumer sentiment is so high, the consumer is flush with cash, there are 2.7 million more consumers this year courtesy of new nonfarm payroll jobs, and they are out spending with abandon.
While fourth quarter growth is not expected to be as robust, the U.S. economy is heading into the new year with some very good news.[photo credit: quinn.anya]
This article was written by Gene Giannotta from Business2Community and was legally licensed through the NewsCred publisher network.