US economy grows 2.9% in Q3 versus 2.5% growth forecast

The US economy expanded at its fastest pace since 2014 in the Q3 of 2016 amid higher exports and a rise in inventory investment, official data revealed on Friday. According to the US Department of Commerce, the economy grew 2.9% in the Q3, following the preceding quarter's 1.4% growth and surpassing the 2.5% pick up market forecast. It was the strongest expansion since the Q3 of 2014. However, the stronger than expected figures are unlikely to influence the Federal Reserve's views, as it is more focused on employment and inflation. US exports jumped 10% in the Q3, the largest increase since the Q4 of 2013, contributing 0.83% to GDP growth. The Q3 rise in exports was led by soybeans and analysts suggest that the momentum could be lost in the Q4. Inventory accumulation by businesses increased $12.6 billion in the reported quarter, contributing 0.61% to GDP growth. Investment in non-residential structures advanced 5.4% in the Q3, the biggest gain since the Q2 of 2014, compared to the prior quarter's 2.1% drop. Meanwhile, business spending on equipment declined 2.7%, falling for the fourth consecutive month. Separately, the Labor Department said the Employment Cost Index remained unchanged at 0.6% in the Q3, in line with analysts' expectations.