Economy Grows at 3.7% Pace in 3Q

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ross domestic product grew at a 3.7% annual pace in the third quarter as consumer spending rose faster than the previous three months, the Commerce Department reported Friday.

The rise in gross domestic product, the value of all goods and services produced, rose to $10.9 trillion after adjusting for inflation, and followed a 3.3% rate of expansion in the second quarter.

Economists expected a 4.3% gain in GDP last quarter, Bloomberg reported.

Commerce said consumer spending, which accounts for more than two-thirds of the economy, rose at a 4.6% pace, almost three times as fast as in the second quarter.

Business fixed investment, which includes spending on commercial construction as well as equipment and software, rose at an 11.7% annual rate in the third quarter, compared with a 12.5% gain the prior quarter, Commerce said.

Companies boosted inventories at a $48.1 billion annual rate, compared with a $61.1 billion increase three months earlier. The country imported $598 billion more goods and services at an annual rate than it exported last quarter.

Government spending rose at a 1.4% annual rate last quarter after a 2.2% increase.

Before inflation, GDP rose at a 5.1% pace to $11.8 trillion. The economy expanded 3.9% during the 12 months that ended in September.