The U.S. economy overcame high energy costs and grew at a slightly faster pace than expected in the third quarter, and inflation indicators in the government's latest data were mainly higher.
The Commerce Department said Friday that U.S. gross domestic product rose at a 3.8% annual rate in the third quarter. Economists had been expecting a 3.6% rate in the advance report, the first of three that will be issued for the quarter. GDP expanded at a 3.3% rate in the second quarter.
Last quarter the economy absorbed the impact of two hurricanes hitting the Gulf Coast, seriously curtailing oil refining and shipping from the region, and bankruptcies at two of the world's biggest airlines,
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Treasuries had little immediate reaction to the report. The yield on the benchmark 10-year Treasury was at 4.55% before the GDP release and held that level afterward.
The major contributors to the increase in real GDP in the third quarter were personal consumption expenditures, equipment and software, federal government spending and residential fixed investment, the Commerce Department said. The contributions of these components were partly offset by a negative contribution from private inventory investment.