The Commerce Department reported that the U.S. economy expanded at its fastest pace since late 2011, and revised the nation’s gross domestic product to 2.7% between July through September, up from a prior estimate of 2.0%. The gross domestic product (GDP) is referred to as the broadest measure of goods and services produced in the U.S..
A growth of company inventories, uptick in federal spending, and strong exports contributed to the GDP growth. The advance was the third-largest quarterly gain of the current recovery. Consumer spending increased by 1.4% during the third quarter. The inventory stockpiling is generally? viewed as companies’ preparation for seasonal events, which may not be sustainable in periods to come. An opposing view is that companies are beginning to believe in a sustained consumer spending pattern and are gearing up inventories to meet anticipated demand.
The effects of Hurricane Sandy (a late October event) on the economic picture are essentially not known yet, and may not be until fourth quarter GDP numbers are in. While business may have slowed in the northeast due to closures and problems, some analysts do not expect the effects of fiscal cliff apprehensions to be substantial since they may not have actually caused delays or postponements of business plans or transactions. Many analysts perceive that top business leaders believe a reasonable solution to the country’s fiscal cliff issues will be resolved – if not by the Dec. 31 deadline when temporary measures may be put into place, then by early Q1, 2013. Neither political party wants to be responsible for the country re-entering into a recession.
In a separate economic news, the Labor Department released data indicating the number of new unemployment claims decreased by 23,000 to a seasonally adjusted 393,000 in the week ended Nov. 24.