U.S. Economy Growing Faster Than Forecast

Source: Alain Sherter / Moneywatch / CBS News

The U.S. economy got an early holiday gift Thursday when the U.S. Commerce Department announced that growth in the third quarter was 2.7 percent, topping a previous forecast.

While the latest economic snapshot is good news for Americans, it raises the heat on Congress and President Barack Obama to reach a deal to avoid taking the nation off the so-called “fiscal cliff,” a package of mandated government spending cuts and expiring tax breaks scheduled to take effect in January. That could throw the economy in reverse just as it appears to be gaining speed.

The new GDP figures are an update of the agency’s estimate last month of 2 percent growth in the July-to-September period. The revised numbers, which are adjusted seasonally, offer a more accurate picture of growth than the government’s initial forecast. The economy grew 1.9 percent and 1.3 percent, respectively, in the first and second quarters.

Propelling the growth in GDP was stronger consumer spending, federal outlays, expanding business inventories and a renewed housing sector, the Commerce Department said.

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