Today’s upward revision indicates that the economy grew in the third quarter at the fastest pace in over a decade. The strong GDP growth is consistent with a broad range of other indicators showing improvement in the labor market, increasing domestic energy security, and continued low health cost growth. The steps that we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 already the strongest year for job growth since the 1990s. Indeed, 2014 was a breakthrough year for the United States across a wide range of metrics important to middle-class families. Nevertheless, there is more work to be done to ensure that all Americans can share in the accelerating recovery.
FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS
1. Real gross domestic product (GDP) grew 5.0 percent at an annual rate in the third quarter of 2014—the strongest single quarter since 2003—according to the third estimate from the Bureau of Economic Analysis.
While quarterly growth reports are volatile, and some of the growth in Q3 reflected transitory factors, the recent robust growth data indicate a solid underlying trend of recovery. Indeed, the strong growth recorded in each of the last two quarters suggests that the economy has bounced back strongly from the first-quarter decline in GDP, which largely reflected transitory factors like unusually severe winter weather and a sharp slowdown in inventory investment. Consumer spending, business investment, and net exports all remained positive contributors this quarter. Real gross domestic income (GDI), an alternative measure of the overall size of the economy, was up 4.7 percent in Q3.