US economy posts highest quarterly growth since 2014

The US economy grew 2.9% in the third quarter, its highest rate of expansion since the second quarter of 2014, according to official data published on Friday (28 October).

The figure represents a near trebling of the growth rate from the first half of the year, when the country registered a gross domestic product uptick of just over 1%.

Headline growth for the third quarter was propped up by a 10% surge in export orders, in tandem with a 2.1% increase in consumer spending and 5.4% increase in business infrastructure, including capital expenditure on rigs and plants.

In a surprising development, US government spending also rose 0.5% for the quarter.

However, higher imports (up 2.3%), and a decline in construction and business equipment spending (down 2.7%) proved to be minor drags on the quarterly performance.

Positive GDP data is likely to add to market sentiment in favour of the Federal Reserve hiking US interest rates in December, especially as analysts polls are currently forecasting another positive, albeit lower, growth projection of 2.1% for the fourth quarter.