The economy grew at a robust 4 percent annual rate in the third quarter and is on a pace for its best performance in at least six years.

Despite rising interest rates intended to slow growth, the Commerce Department reported Thursday that consumer spending remains strong. Personal spending combined with business investment and government outlays to lead the surge in the July-September quarter.The gross domestic product, which measures all goods and services produced in the United States, was revised upward from a month-old estimate of a 3.9 percent rate. The slight increase, attributed largely to more spending by foreign travelers here, was in line with analysts' expectations.

"We continue to believe that the economic fundamentals are very good: Growth is strong, very low inflationary pressure," White House press secretary Dee Dee Myers said Thursday. "We're very optimistic about the prospects for continued growth and a continued healthy economy."

Still, many are worried that the good times soon may end as interest rates climb even higher.

View Comments

With both the Christmas shopping season and the year drawing to a close, economists predict the fourth quarter expansion also will be around a 4 percent rate.

If they are correct, that means the economy is on pace to at least equal the 3.9 percent advance of 1988. Any additional growth could mean the best performance since a 6.2 percent surge in 1984.

Separately, the Labor Department reported Thursday that the number of Americans filing first-time claims for jobless benefits rose by 3,000 last week to the highest level in a month. The department said new applications for unemployment insurance totaled a seasonally adjusted 326,000 during the week ended Dec. 17, up from 323,000 a week earlier.

The data also showed that inflation, while still under control, was a bit higher in the third quarter than previously estimated. An inflation gauge tied to GDP was revised upward to 3 percent from 2.8 percent. The same gauge showed inflation at 2.9 percent in the second quarter.

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.