The economy's robust and improving pace of expansion further strengthens the argument for a third Fed Funds rate increase in January. Jerome Powell, President Trump's nominee to replace current Chair Janet Yellen said recently that the case for a rate increase next month was comng together.
Ms Yellen told Congress on Wednesday that "the economic expansion is increasingly broad-based across sectors," and that she expected that "the economy will continue to expand."
It is possible that the third quarter pace exagerates the overall stability of the expansion as the build in inventories, goods manufactured but not sold, contributed 0.8 percent to growth, revised from 0.73 percent. Absent this inventory addition the economy expanded at a 2.5 percent annual rate.
But it is also possible that businesses have judged the economic conditions correctly and the strong job market, healthy home prices and booming equities will provide consumerss with the rationale for inceasing spending and purchasing that inventory.