The U.S. economy grew at its quickest pace in 11 years in the third quarter, the strongest sign yet that growth has decisively shifted into higher gear.
The Commerce Department on Tuesday revised up its estimate of gross domestic product growth to a 5% annual pace from the 3.9% rate reported last month, citing stronger consumer and business spending than it had previously factored in.
It was the fastest growth pace since the third quarter of 2003. GDP growth has now been revised up by a total of 1.5 percentage points since the first estimate was published in October.
Big revisions to GDP data are not unusual as the government does not have full information when it makes its initial estimates.
The American economy expanded at a 4.6% rate in the second quarter. It has now experienced the two strongest back-to-back quarters of growth since 2003. Economists polled by Reuters had expected growth would be raised to a 4.3% pace.
While the pace of growth likely slowed in the fourth quarter, a rapidly strengthening labour market and lower gasoline prices should provide the economy with sufficient momentum in 2015 and keep the Federal Reserve on course to start raising interest rates by the middle of next year.
