Businesses, trade to support U.S. third-quarter growth 

A robust pace of business spending likely buoyed U.S. economic growth in the third quarter, a sign corporate chieftains have confidence in the sustainability of the recovery.

Gross domestic product likely grew at a 3.0 percent annual pace, according to a Reuters survey of economists, with housing, trade, government and consumers also lending support.

While that would be a step down from the second quarter’s brisk 4.6 percent pace, it would the fourth quarter out of five that the economy has expanded at or above a 3 percent clip.

“It was a very good quarter for business investment,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester Pennsylvania.

With unused factory capacity nearing pre-recession levels, the GDP report is expected to show a second straight quarter of double-digit growth in spending on equipment and a rise in investment in structures.

While data on Tuesday suggested some moderation in the pace of equipment investment in the fourth quarter, it is still expected to remain strong enough to keep the economy on a higher growth pace.

“There is no doubt that business investment activity has picked up over the last quarters, reflecting more confidence in the durability of the recovery,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.

One of the few areas that is likely to drag on growth is inventories. A build up in inventories had added 1.42 percentage points to growth in the second quarter.

Source: Reuters-Businesses, trade to support U.S. third-quarter growth

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