U.S. economy hit the gas in the third quarter

WASHINGTON - The U.S. economy in the third quarter grew at the strongest pace in two years, with a revised report showing stronger consumer spending than first estimated.

The Commerce Department says the gross domestic product, the country’s total output of goods and services, expanded at an annual rate of 3.2 percent in the July-September period. That is up from a previous estimate of 2.9 percent.

The revision was significantly better than the meager gains of 0.8 percent in the first quarter and 1.4 percent in the second quarter when the economy was being held back by a strong dollar and weak business investment.

“The U.S. economy is in good shape in the second half of 2016,” said Gus Faucher, deputy chief economist with PNC Financial Services Group. “Whether looking at GDP or Gross Domestic Income, economic growth in the third quarter was the best in two years. After some softness in late 2015 and early 2016, tied to an inventory correction and a downturn in energy production, growth has picked back up.”

The 3.2 percent increase was expected to be the best showing for the year. Economists believe growth has slowed to around 2 percent in the current quarter.