GDP, the broadest measure of goods and services produced in the economy, grew at a 3.6 percent seasonally adjusted annual rate from July through September, up from an earlier 2.8 percent estimate.
The reading was significantly better than the 3.1 percent economists had predicted and represents the strongest growth rate since the first quarter of last year.
However, the upward revision was driven largely by businesses stockpiling inventory. The inventory gain accounted for almost half of the new growth figure.
Inventory gains are notoriously volatile and economists are already predicting that they may sap growth in the fourth quarter as businesses cut back.
“Still, the economy did have some momentum heading into the government shutdown, and will continue to expand in 2014,” PNC Bank said in a note to investors.
“With less fiscal drag, a better global economy, continued gains in consumer spending, a pickup in business investment, and the ongoing recovery in the housing market, growth in 2014 will be around 2.5 percent, noticeably stronger than the 1.7 percent pace this year,” it said.
The figures come ahead of the release of the latest monthly nonfarm jobs report yesterday.
This week ADP, the payroll processor, said private business had added 215,000 jobs last month, the largest gain of the year.
The economic figures come ahead of a US Federal Reserve meeting scheduled for Dec. 17 and Dec. 18.
The Fed is pumping US$85 billion a month into the US economy through the quantitative easing stimulus program.
It has tied any tapering of the program to falling unemployment and clearer signs of sustainable economic growth.
However, the latest GDP figures present a mixed picture. Apart from the volatile inventory numbers, consumer spending was noticeable weak.
It grew just 1.4 percent during the third quarter, the weakest gain since the recession ended.
Corporate profits increased by 1.8 percent annualized in the third quarter and by 6.4 percent over the year to the third quarter.
“Admittedly, the upward revision to third-quarter growth was largely due to even stronger inventory accumulation, which is now estimated to have added 1.6 percent to overall GDP growth, double the initial estimate,” Capital Economics economist Paul Ashworth said.
“But that inventory building isn’t because sales were disappointing and firms were left with unsold product,” he added.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day