Economy in U.S. Grew 4.6% in Second Quarter, Most Since 2011.

http://www.bloomberg.com/news/2014-09-26/economy-in-u-s-expanded-4-6-in-second-quarter-most-since-2011.html

The U.S. economy expanded in the second quarter at the fastest rate since the last three months of 2011 as companies stepped up investment and households boosted spending.

Gross domestic product grew at a revised 4.6 percent annualized rate, up from a previous estimate of 4.2 percent, Commerce Department data showed today in Washington. The increase matched the median forecast of 81 economists surveyed by Bloomberg and followed a 2.1 percent decline in the first three months of the year.

Busier assembly lines at the nation’s factories and job growth that’s kept Americans spending indicate companies are a bit more upbeat about the prospects for demand. As the world’s largest economy and labor market improve, Federal Reserve policy makers are debating how much longer to keep interest rates near zero.

“We definitely see momentum,” in the U.S. economy, said Brittany Baumann, an economist at Credit Agricole CIB inNew York, which correctly forecast GDP. “Consumer spending should benefit from strengthening labor conditions and improved financial conditions,” while business investment should also continue, she said.

Forecasts for second-quarter GDP, the value of all goods and services produced in the U.S., ranged from gains of 3.4 percent to 5 percent, according to the Bloomberg survey. The estimate is the third and final for the quarter.

Fed’s Yellen

“The labor market has yet to fully recover,” Federal Reserve Chair Janet Yellen said at a press conference after a monetary policy meeting concluded Sept. 17. “There are still too many people who want jobs but can’t find them.”

Fed policy makers are debating how much longer to keep interest rates near zero as they approach their goals for full employment and stable prices. Central bank officials tapered monthly bond buying to $15 billion last week in their seventh consecutive $10 billion cut, staying on course to end the program in October.

Today’s report also showed price pressures remain limited. A measure of inflation, which is tied to consumer spending and strips out food and energy costs, climbed at a 2 percent annualized pace compared with 1.2 percent in the prior quarter.