The late summer months, it now appears, were a period of rip-roaring economic growth in the United States.
In the third and final revision of third-quarter GDP numbers, the Commerce Department now estimates that output rose at a 4.1 percent annual rate in the July-through-September quarter. It had previously estimated growth at 3.6 percent. That makes last summer the second-best quarter for growth since before the recession in 2007 (the fourth quarter of 2011 logged an even more remarkable 4.9 percent).
Still, for reasons we've discussed before, the strong third-quarter numbers should be taken partly with a grain of salt. A run-up in business inventories contributed 1.7 percentage points to overall growth, which is not likely to repeat (read more about why here). But the revision does point to stronger momentum in "final demand," or growth excluding swings in inventories. Final demand grew at a 2.4 percent rate, which is decent but a far cry from the 4.1 percent overall growth number.
The stronger revision was driven overwhelmingly by personal consumption spending. It rose at a 2 percent rate in the third quarter, the Commerce Department now estimates, not the 1.4 percent earlier thought.
That's a huge swing in the segment of the economy that accounts for more than two-thirds of all economic activity. And while the quarter covered in this revision ended way back in September, it gives reason for optimism that Americans - -girded by a rising stock market and housing wealth, a steadily improving job market and falling debt burdens -- are in increasingly solid shape.
The third quarter may be ancient history, but the more we know about it, the more it points to a merry Christmas and happy New Year, indeed.