WASHINGTON — The U.S. economy grew 4 percent in the third quarter, faster than previously forecast, the Commerce Department reported Wednesday in its monthly Gross Domestic Product index.
The increase in the total amount of all goods and services produced was spurred by personal consumption of goods and services — a key component of the GDP — which gained 5.1 percent on an annualized basis. The Gross Domestic Product had been projected to grow 3.9 percent, the Commerce Department said.
In comparison, the economy gained 3.3 percent in the second quarter and 4.5 percent in the first quarter. The economy is anticipated to expand about 4 percent for the year. The Bush administration is forecasting a slower growth rate of 3.5 percent next year.
The total amount of goods and services in the third quarter was $10.9 trillion, up 1 percent from the second quarter. Spending on clothing and shoes rose a seasonally adjusted 1.5 percent to $351.6 billion against the second quarter, when spending fell 1.4 percent to $346.5 billion. Compared with the same period in 2003, clothing and shoe sales in the third quarter increased 12 percent.
Minus personal outlays, disposable income in the third quarter increased 4.5 percent to a seasonally adjusted $8.588 trillion, compared with $8.209 trillion for the same period last year.
The stock markets had a positive reaction to the Commerce Department report that the Dow Jones Industrial Average rose 56.46 points, or 0.5 percent, to close Wednesday at 10,815.89, a three-and-a-half-year high. The broader Standard & Poor’s 500 index inched up 4.12 points, or 0.3 percent, to 1,209.57 and the S&P Retail index advanced 3.6 points, or 0.8 percent, to 455.29.