WASHINGTON (AP) -- The Commerce Department issues its second of three estimates on how fast the U.S. economy grew in the July-September quarter. The report will be released at 8:30 a.m. Eastern Thursday.
SLIGHTLY FASTER: Analysts forecast that third-quarter growth will be revised to a 3.1 percent annual rate, according to a survey by FactSet. That would be up from an initial 2.8 percent rate reported last month and much stronger than the 2.5 percent growth rate in the April-June quarter.
SLOWDOWN AHEAD: Many analysts believe growth has slowed in the current October-December period to an annual rate of around 2 percent.
They base that forecast in part on the fact that nearly one-third of the third-quarter growth came from a buildup in business stockpiles. That boost is likely to slow in the current quarter, unless businesses see a pickup in consumer spending. Slower restocking would hold back fourth-quarter growth.
OTHER SIGNS OF LIFE: In addition to the boost from stockpiling, home construction added to growth in the third quarter and state and local governments spent at the fastest pace in four years. But consumers and businesses slowed their spending. Consumer spending is critical because it drives 70 percent of economic activity.
A number reports have offered some promise of a stronger fourth quarter than some economists predict.
In October, spending at retail businesses rose solidly, U.S. exports grew to a record level and employers added 204,000 jobs. November car sales rose 9 percent and are running at an annual rate of 16.4 million, the best performance of the year, according to Autodata Corp.
But early reports on holiday shopping have been disappointing. The National Retail Federation estimates that sales over the four-day Thanksgiving Day weekend — arguably the most crucial shopping stretch for retail businesses — fell for the first time since the group began keeping track in 2006.
Faster growth could make the Federal Reserve more inclined to begin slowing its bond purchases, which have kept long-term interest rates low and encouraged more borrowing and spending.
Many economists believe the central bank will not reduce the $85 billion-a-month pace when it meets later this month.
A survey of chief executives of the largest U.S. companies showed that they are slightly more optimistic about the economy's prospects over the next six months and expect to boost hiring.
The Business Roundtable said Wednesday its survey found the executives of the 200 largest U.S. companies expect growth to remain subpar at around 2.2 percent growth next year. And 34 percent of the executives said they planned to increase hiring, up from 32 percent in the group's previous survey.
Economists at JPMorgan Chase are forecasting growth of 2.4 percent for 2014.
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