US GDP grew by 3.5 percent in third quarter

US Gross Domestic Product (GDP) expanded by an annual rate of 3.5% in the third quarter of 2014, the Bureau of Economic Analysis, part of the Department of Commerce announced on Thursday. In the second quarter the economy had grown by 4.6%, after contracting in the first quarter.

The US economy has had its best 6-month growth performance in over a decade.

The second quarter’s high growth rate was mainly due to pent-up demand that was subdued in Q1 because of an abnormally severe winter. Economist say the Q3 figure was better than they expected, and believe the country may be entering a period of strong growth again.

Rising oil production is reducing imports and shrinking the country’s trade deficit, as well as contributing to strong manufacturing growth. Employment gains and cheaper gasoline are giving households the confidence to spend more.

Third quarter growth was driven by exports, business investment and federal government spending.

Exports expanded by 7.8% in Q3, compared to 11.1% in Q2. Business investment grew by 5.5%, versus 9.7% in the second quarter, while Federal government expenditure jumped 10%, which included a 16% rise in defense spending. In the second quarter, Federal government spending had declined by 0.9% in Q2.

Consumer spending, which makes up more than 70% of GDP, grew by 1.8% in Q3, compared to 2.5% in Q2. Some economist had expected lower fuel prices to boost household spending more.

Stockpiling was significantly reined in by businesses, after adding to inventories strongly in the second quarter.

During the United State’s five-year old economic rebound, GDP has risen by more than 2% in every quarter except one, and by over 3% in four of the last five quarters.

Many analysts now wonder how the economy will perform as global growth slows down and the dollar strengthens.

For many Americans, the country’s five years of economic growth has eluded them. After the Great Recession, which reduced living standards, wages have barely kept up with inflation.