US third quarter growth fastest in three years at 3.3%

Washington: The US economy posted its best performance in three years in the third quarter, growing even faster than initially reported, according to official data released Wednesday.

The revised figures showed growth remains resilient despite back-to-back hurricanes in late summer that barely left a scratch on the world`s largest economy.

GDP growth in the July-September quarter was revised up to 3.3 percent, three tenths of a point higher than the initial estimate and the strongest performance since the third quarter of 2014.

The result means growth has surpassed the White House`s three-percent target for the second quarter in a row, after expanding 3.1 percent in the April-June period. However, but the grwoth rate for the full year is likely to come in closer to 2.5 percent.

The six months from April to October saw the fastest economic expansion since the same period in 2014, when GDP grew by an average of 4.9 percent. So far this year, however, the economy has expanded less than 2.5 percent, in line with growth in prior years.

The latest quarterly estimate, which remains subject to revision in the coming months, overshot analyst expectations, which had called for a result of 3.2 percent.

The news comes as Republican lawmakers in Washington enter a delicate and crucial phase in efforts to adopt a sweeping overhaul of the US tax code.

The White House and senior Republican lawmakers have argued the $1.5 trillion tax package will pay for itself by spurring economic growth -- though economists say there is little evidence to support this claim, especially in an already-growing economy.

Third quarter growth reflected upward revisions to business spending on computer software and transportation equipment, with investment in equipment hitting its fastest pace in three years at 10.4 percent.

State and local governments also appear to have spent more on buildings while manufacturing inventories were higher than previously estimated.

That helped offset downward revisions to in durable goods orders and services exports.

The quarterly increase in consumer spending on services, a key driver of the US economy, was unrevised at 1.5 percent, its lowest level in four years.

The faster growth was likely to be one more factor nudging the Federal Reserve toward another interest rate increase next month -- its third of the year -- although policymakers already were headed in that direction.