The U.S. economy grew at a 5.0% annual pace in the third quarter, matching the best performance since the third quarter of 2003. The increase in real gross domestic product was revised up from 3.9%, mainly because of consumer spending and business investment, the Commerce Department said Tuesday. Economists polled by MarketWatch had predicted GDP would be revised up to a seasonally adjusted 4.4%. Consumer spending, the main source of economic activity, was revised up to 3.2% from 2.2%.
It's getting easier to believe this argument all the time. Take this morning, for example.
Remember, GDP growth at 3.9% looked pretty good when the preliminary tally was released a month ago. But 5% growth is amazing -- and the strongest growth Americans have seen in 11 years.
Also keep in mind, all of this covers just the third quarter -- July through September -- which came before the sharp drop in gas prices. In other words, there's ample reason to be optimistic about the fourth quarter, too.
As for the politics of the economy's sharp improvement, it seems Republicans are going to struggle quite a bit to explain these developments.
As we discussed a month ago, GOP lawmakers have invested enormous amounts of energy pushing a very specific case: the combination of the Affordable Care Act, federal regulations, Dodd-Frank reforms, and higher taxes approved last year are a brutal "wet blanket" on economic growth. It's all proof, they claim, that President Obama's economic agenda has been a disaster for the country.
And in light of the recent jobs boom and the strongest economic growth in 11 years, the Republican talking points are starting to look a little silly.
Before we move on, let's also note, in case GOP officials try to suggest there's a connection between their election and the growth surge, the third quarter economic report points to data that ended in September -- before anyone knew what the election results would be.
I'm also trying to imagine what the political world's conversation would look like right now if we were in the second year of the Romney presidency. One can only assume there would be parades organized in the Republican hero's honor and "Mitt" would suddenly become a popular name in conservative households.
As for the image above, the chart shows GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.