Consumer cash and credit purchases helped propel the U.S. to its fastest economic growth in more than a decade between July and September 2014, according to revised estimates of real GDP growth released Tuesday.
Consumer spending, helped along by falling gasoline prices, rose more than forecast in November as incomes increased, U.S. officials said.
Gross domestic product grew at a 5 percent annual rate from July through September, the biggest advance since the third quarter of 2003. GDP is up from a previously estimated 3.9 percent, according to revised figures from the Commerce Department. The median forecast of most economists called for an increase closer to 4 percent.
Household purchases climbed 0.6 percent, the most in three months, after a larger-than previously reported 0.3 percent October gain, according to Commerce Department figures.
U.S. consumers are shopping more often for clothing, electronics and automobiles, bolstering confidence in the economy. The improving outlook for household spending, which accounts for about 70 percent of the economy, will spur growth this quarter and into 2015, despite struggling economies around the world.
Growth in business investments was adjusted higher to an 8.9 percent pace, from a 7.1 percent rate, thanks to a stronger pace of spending than previously projected on equipment, intellectual property products and nonresidential structures accounting for the revision.