Obama says 2014 will be 'breakthrough' for US economy

Barack Obama US President Barack Obama touted upward revisions to economic growth

Related Stories

Citing stronger growth figures, US President Barack Obama says 2014 will be a 'breakthrough year' for the US economy.

Economic growth in the US was revised upwards to its fastest pace since late 2011 on Friday.

The Commerce Department said GDP grew at an annualised rate of 4.1% between July and September, up from an earlier 3.6% estimate.

That gave shares a boost and the Dow and S&P 500 indexes closed at records.

In his last press conference of the year, the US President highlighted the improving data as promising for the year ahead.

"We head into next year with an economy that's stronger than it was when we started the year [and] more Americans are finding work and experiencing the pride of a paycheck," he said.

Much of the revision was due to stronger consumer spending, which accounts for two-thirds of the economy.

Business spending was also stronger than previous estimates.

Dow Jones Industrial Average

Last Updated at 24 Oct 2014, 16:26 ET *Chart shows local time Dow Jones intraday chart
value change %
16805.41 +
+127.51
+
+0.76

Top winner and loser

Microsoft Corp.

46.13 +
+1.11
+
+2.47

Visa Inc.

213.48 -
-0.80
-
-0.37
Good week for markets

On Wednesday the US central bank, the Federal Reserve, announced it would start to slow its economic stimulus programme because of the improving economy - in particular the falling unemployment rate.

The central bank said it planned to scale back - or "taper" as it is known in the financial world - its $85bn (£51.8bn) a month bond buying programme by $10bn a month.

The Dow Jones Industrial Average rose 3% for the week to close out at a record level on news of the Fed's decision and the stronger economic data.

The S&P 500 and Nasdaq also trended higher.

Analysts were encouraged by the GDP revision.

"Not only was third-quarter GDP above 4.0% for only the third time since the expansion began in 2009, the mix of growth looks better (though still not great) than a month ago after the first revision," said Chris Low and Jay Morelock of FTN Financial in a research note.

Previously, most of the third-quarter economic growth had come from a build up in business inventories.

This had concerned many analysts, because a build up in inventories doesn't necessarily indicate present demand but a hope for future buying.

"The strong Q3 growth performance vindicates the Fed's decision to begin tapering QE3," said Sal Guatieri of BMO Capital Markets Economics.

"It also suggests the economy is poised for stronger growth in the new year than the middling 2% pace of the past year, meaning the tapering process will continue," he added.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

From BBC Capital

Programmes

  • The Audi RS7Click Watch

    Tech news review of the week including a speed record for a self-driving car

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.