US economy grew at strong 3.5 pct. annual rate last quarter

Martin Crutsinger CP

WASHINGTON — The U.S. economy grew at a 3.5 per cent annual rate in the July-September quarter, the fastest pace in two years and more than the government had previously estimated. But the growth spurt isn't expected to last.

The Commerce Department says the gain in the gross domestic product, the economy's total output of goods and services, came from added strength in consumer spending, business investment and the government sector. The government had previously estimated last quarter's annual growth rate at 3.2 per cent.

The third quarter increase was a sharp acceleration from tepid annual growth of 0.8 per cent in the first quarter and 1.4 per cent in the second. Growth is expected to slow to roughly a 1.5 per cent rate in the current quarter, reflecting in part less consumer spending and business stockpiling.