US GDP growth revised up to 3.9 per cent for the third quarter

Jessica Morris
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GDP growth was much stronger than expected (Source: Getty)

The US economy grew more than expected over the last three months, data released by the US Commerce Department has shown.

The world's largest economy grew 3.9 per cent in the third quarter, or 0.4 per cent more than originally reported.

This was well above expectations: economists had predicted it would be revised down to 3.3 per cent, according to a poll by Reuters.

It's another clear sign the US economy is strengthening, having now had the two strongest back-to-back quarters of growth since 2003.

However, there are concerns it could be pulled down by a worsening global outlook.

Earlier today, the Organisation for Economic Development (OECD) said the US economy will grow by 2.2 per cent this year.

Nonetheless, it said as the US and the UK wind down stimulus measures, global monetary policy will diverge, leading to market volatility.

Rob Carnell, chief economist at ING Commercial Banking said:

Whilst some parts of this release do suggest that the US economy has more momentum than initially indicated, both inventories and the defence component of government spending are likely to revert to being considerable drags in the fourth quarter.
At the margin, these figures make it easier for the Fed to move towards pushing rates higher next year. But a lot can happen between now and the April 2015 rate hike the market is pricing in.

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