Q3's GDP Growth Could Be Rosiest of Year

The US gross domestic product appears to have actually grown at a 2.9% annual rate between July and September, the fastest quarterly growth seen this year. That rate, via analysts at Goldman Sachs and Barclays, is higher than the Commerce Department's initial estimate of 2.0%—and it suggests the economy will take Hurricane Sandy's damage in stride. Improving housing and job markets, as well as better household finances, are spurring consumer confidence and spending, Bloomberg notes.

The growth "doesn’t make us invulnerable," notes a Barclays executive. "But it’s better than if the economy had already been slowing sharply and then we were hit" with events like Sandy. The hurricane could cut half a percentage point from fourth-quarter GDP, says the Goldman exec, and the fiscal cliff also poses a threat. But with "solid momentum" going into the fourth quarter, the US economy should be able to keep growing, says the Barclays economist. "The economy is somewhat stronger than people are giving it credit for," notes an ING director. Any upward revision to Q3 GDP will be reported on Nov. 29. (More Hurricane Sandy stories.)