Economy takes turn for better.
NEW YORK -- As retailers start the new year, several indicators point to a strengthening U.S. economy.
The gross domestic product grew 4.1% in the third quarter, its highest rate in two years.
Consumer spending in November rose 0.5 % on top of a 0.4% advance in October. The climb matched economists' forecasts and marked the seventh straight monthly increase.
Also in November, the unemployment rate fell to 7%, its lowest level since the end of 2008. The improving job market led the Federal Reserve to begin tapering off bond buying designed to stimulate growth.
The action reflected the assessment "that the economy is continuing to make progress but that it also has much farther to travel before conditions can be judged normal," said outgoing Fed chairman Ben Bernanke. "Notably, despite significant fiscal headwinds, the economy has been expanding at a moderate pace, and we expect that growth will pick up somewhat in the coming quarters, helped by highly accommodative monetary policy and waning fiscal drag."
Also, consumer confidence in December reached 82.5, its highest mark since July. "Consumers were clearly relieved when the D.C. gridlock ended," said Richard Curtin, director of the Thomson Reuters/University of Michigan Surveys of Consumers. "Confidence has bounced back to nearly the same levels it was before the crisis in mid-2013."
And amid the positive signs, some economists boosted their fourth-quarter growth estimates.