WASHINGTON, Dec. 20 (Xinhua) -- The U.S. economy grew at its fastest pace in nearly two years in the third quarter, boosted by private inventories, residential fixed investment and personal consumption, evidence that U.S. economic recovery was gaining momentum.
U.S. gross domestic product (GDP) grew at a 4.1 percent annual rate in the third quarter, the fastest pace since the fourth quarter of 2011 and also an acceleration from the 3.6 percent pace reported earlier this month, the Commerce Department said in its third estimate on Friday.
U.S. real GDP gained 2.5 percent in the second quarter, the Commerce Department said.
The American economy is "finishing 2013 in a stronger place than it began the year. While there's more work to be done to strengthen the economy, create jobs and lower the unemployment rate, this progress is significant and notable," Jason Furman, chairman of the White House Council of Economic Advisers, said Thursday.
The Commerce Department said increases in personal consumption expenditures (PCE) and in nonresidential fixed investment were larger than previously estimated.
The change in real private inventories added 1.67 percentage points to the third-quarter change in real GDP. Real PCE increased 2.0 percent in the third quarter, up from an increase of 1.8 percent in the second quarter, it said.
Personal consumption accounted for about 70 percent of overall U.S. economic activity, making it the main engine of economic growth.
Against the backdrop of a housing sector recovery, real residential fixed investment increased 10.3 percent in the third quarter, down from an increase of 14.2 percent in the prior quarter, the department said.
Real nonresidential fixed investment increased 4.8 percent in the third quarter, compared with an increase of 4.7 percent in the second quarter, it said.
Real federal government consumption expenditures and gross investment decreased 1.5 percent in the third quarter, following a fall of 1.6 percent in the second quarter.
Real state and local government consumption expenditures and gross investment increased 1.7 percent in the third quarter, compared with a growth of 0.4 percent in the previous quarter, the department said.
A two-year budget plan crafted by bipartisan negotiators has been passed by both chambers of Congress, eliminating the threat of a government shutdown in the next two years and easing 63 billion U.S. dollars in the ongoing automatic spending cuts, known as the sequester.
A string of upbeat economic data released earlier this month pointed to solid economic growth in coming months.
U.S. unemployment rate in November declined to 7 percent, the lowest level in five years, with job creation growing at a steady pace. U.S. privately-owned housing starts were at a seasonally adjusted annual level of 1.09 million in November, 29.6 percent above the year-ago level.
On the back of a strong economic recovery, the U.S. Federal Reserve announced Wednesday it would reduce the pace of its monthly massive bond purchases, the third round of quantitative easing program, by 10 billion dollars starting in January.