- Jim O'Sullivan, chief U.S. economist at High Frequency Economics
The world's number one economy grew faster in the third quarter than originally estimated. Gross domestic product rose at a 2.1% annualized rate, compared with the initial reading of 1.5%, according to the Commerce Department. The consumer spending was the biggest contributor to growth as cheap gasoline and greater job security gave more confidence to spend. Household consumption, which makes up almost 70% of the economy, grew at a 3% annualized rate, slightly less than the previously estimated 3.2%. The final release of GDP data for the third quarter is scheduled for late December. Steady growth in the world's largest economy helps to create jobs and push down the unemployment rate, which Fed policy makers are watching as a gauge of how much slack is left in the labour market. Fed officials are considering hiking the benchmark interest rate as soon as next month, if data continue to indicate that the US economy can weather tighter monetary policy.
Nevertheless, consumer confidence in the US economy weakened sharply in November as Americans became more concerned about the job market. According to the Conference Board, the index of consumer confidence plunged to 90.4 from a revised 99.1 last month, marking the second consecutive monthly drop and the lowest reading since September 2014.
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