Revision shows US growing at fastest rate since 2011

Country revises third quarter growth to 4.1% from 3.6%

The US economy grew at its fastest pace in almost two years in the third quarter,the government said on Friday as it revised its estimates of business and consumer spending higher.

The upward revisions also extended to exports and suggested some underlying strength in the economy,even though growth in the quarter was largely driven by a buildup in inventories.

The report was supportive of the Federal Reserve’s decision this week to reduce by $10 billion from January the $85 billion it is pumping into the economy each month through bond purchases.

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Gross domestic product grew at a 4.1 per cent annual rate instead of the 3.6 per cent pace reported earlier this month,the US Commerce Department said in its third estimate. That was the quickest pace since the fourth quarter of 2011 and an acceleration from the April-June quarter’s 2.5 per cent.

Third-quarter growth was first estimated at a 2.8 percent rate. Stocks on Wall Street rose on the data,putting the Standard & Poor’s 500 index on pace for its biggest weekly gain in five months. Consumer spending,which accounts for more than two-thirds of US economic activity,was raised 0.6 percentage point to 2.0 per cent. The revisions reflected higher spending on goods and services.

Yellen clears Senate hurdle

WASHINGTON: The US Senate has cleared the way for Janet Yellen to succeed Ben Bernanke as head of the Federal Reserve.

Senators voted 59-34 Friday to end debate on the president’s nomination of Yellen. Approval is expected January 6,the day the Senate returns from winter recess.

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The 67-year-old Yellen will become the first woman to lead the Fed in its century-old history. She will also be the first Democrat to lead the Fed since Paul Volcker left in 1987.

Yellen is currently vice chair of the Federal Reserve.

Bernanke told reporters that Yellen supported the Fed’s decision this week to gradually reduce the monthly bond purchases the Fed has been making to goose the economy.