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U.S. economic growth was far stronger than initially thought in the third quarter, pointing to strengthening fundamentals that should support the economy for the rest of the year.
The Commerce Department on Tuesday raised its estimate of gross domestic product to a 3.9 percent annual pace from the 3.5 percent rate reported last month, reflecting upward revisions to business and consumer spending. Growth had increased at a 4.6 percent rate in the second quarter. The economy has now experienced the two strongest back-to-back quarters of growth since 2003. Economists polled by Reuters had expected growth would be cut to a 3.3 percent pace. It was the fourth quarter out of the past five that the economy has expanded above a 3.5 percent pace. Data ranging from manufacturing to employment and retail sales suggest the economy retained some of that momentum early in the fourth quarter. The United States remains a bright spot in an increasingly gloomy global economy, with Japan back in recession and growth in the euro zone and China slowing significantly.