The Commerce Department said the economy expanded last quarter at the fastest pace in nearly two years — and more than twice the 2.1% annual rate of the previous quarter.
The growth figures for the third quarter revealed that federal, state, and local governments ramped up their spending, and businesses built up their stockpiles of goods in warehouses and on shelves, which helped drive growth higher. The increase in inventories, which accounted for about a quarter of the July-September growth, isn't likely to be repeated in the coming months, economists say.
A range of factors are helping fuel consumer spending, which accounts for the bulk of the economy’s growth. Though many Americans are still feeling under pressure from two years of high inflation, average pay has outpaced price increases and enhanced people’s ability to spend. Americans, as a whole, also began the year on healthy financial footing, according to a report last week from the Fed. The net worth of a typical household jumped 37% from 2019 through 2022. Home prices shot higher, and the stock market rose in the biggest surge on records dating back more than 30 years.
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