US growth picks up in third quarter

US economic growth accelerated in the third quarter as businesses restocked shelves but the slowest expansion in consumer spending in two years pointed to an underlying weakness.

Gross domestic product expanded at a 2.8 per cent annual rate,the quickest pace since the third quarter of 2012,the US Commerce Department said. It was a pick-up from a 2.5 per cent clip in the second quarter and beat economists expectations for 2.0 per cent growth.

Details of the first estimate of third-quarter GDP were generally weak,with inventories contributing 0.83 percentage point to GDP growth. Excluding inventories,the economy grew at a 2.0 per cent rate after expanding 2.1 per cent in Q2.

Business spending growth also slowed sharply,lending the report a weak tone and validating the US Federal Reserves decision to stick to its 85 billion monthly bond-buying programme.