The US economy continued its strong growth in the third quarter, increasing at a 3.5% clip from July through September. Growth was slightly slower than the 4.6% experienced in the second quarter, but still strong enough to please economists. The strength of the economy was attributed to rising exports and federal spending.
The US appears to be in better shape going forward than much of the developed world. Europe is still experiencing problems, and even China’s juggernaut economy is slowing down.
The solid growth numbers thus far in 2014 have led to strong job growth, with several consecutive months seeing gains of over 200,000 jobs. The unemployment rate tumbled to 5.9% in September, the lowest figure since the great recession began in 2008. Job growth is expected to continue in the coming months.
The long stretch of good economic news has led to growing consumer confidence as well. Confident consumers are more likely to spend money, which will in turn help the economy even more. Sinking fuel prices are also putting more dollars into consumer hands. Gas prices have been tumbling across the nation, and are expected to keep falling over the coming weeks.
Government spending provided a boost to the economy, mostly coming in the form of defense spending. Federal spending increased 10% overall, but defense spending increased by 16%. Government spending is important in any economy, as it usually provides a stronger economic boost than tax cuts or other stimulus measures.
The economic outlook is now strong enough that the Federal Reserve has decided to end its own stimulus program. Investors had been worried about the end of this monetary stimulus for some time, but thus far the stock market has not reacted negatively to the news. The Dow Jones Industrial Average was back over 17,000 as of this morning.