Figures released Tuesday by the US Department of Commerce show Gross Domestic Product (GDP) grew by 3.9 percent in the third quarter of 2014.
The Department's Bureau of Economic Analysis said the increase "reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, exports, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from private inventory investment." However, "imports, which are a subtraction in the calculation of GDP, decreased," the Bureau affirmed.
In a statement released by the White House, Chairman of the Council of Economic Advisers Jason Furman said the news affirms "that economic growth in the third quarter was strong, consistent with a broad range of other indicators showing improvement in the labor market, increasing domestic energy security, and continued low health cost growth." He added that "since the financial crisis, the US economy has bounced back more strongly than most others around the world, and the recent data highlight that the United States is continuing to lead the global recovery." Real GDP growth was "revised up 0.4 percentage point from the advance estimate released in October," due to "contributions of consumer spending and business investment," the data expressed.
Meanwhile "gross national saving edged up to reach its highest level as a share of GDP since the end of 2006," largely due to "the reduction in the Federal budget deficit at the fastest pace since the demobilization after World War II, as a falling deficit increases national saving." When it comes to transactions between the US and the rest of the world, "the current account deficit remained near its lowest level since the late 1990s, as the United States continues to ease its dependence on foreign capital," third-quarter figures showed.
"When the current account is in deficit, as it has been for most of the past thirty years, the United States borrows from abroad to finance its spending," Furman explained in his statement. "But our current account deficit has narrowed sharply since the crisis, indicating reduced reliance on foreign borrowing. The US current account deficit now stands at 2.6 percent of GDP, down from more than 6 percent in 2005. This is another imbalance that is improving in this recovery." Finally, Tuesday's numbers demonstrated that "real private domestic final purchases (PDFP)-the sum of consumption and fixed investment-is up 3.0 percent over the last four quarters, a faster four-quarter growth rate than real GDP." Furman explained that "real PDFP growth is generally a more stable and forward-looking indicator than real GDP because it excludes highly volatile components like inventory investment and net exports." While the overall report is positive, he acknowledged there is "more work to be done to boost growth in the United States and around the world," but stressed that Congress must work with the Obama Administration to promote a stronger economy.