The US economy grew at a 2.9% rate in the third quarter, the fastest in 2 years

U.S. economy posts best growth in 2 years

By Patrick Gillespie
America finally got some good economic growth.

The U.S. economy expanded at a 2.9% annual rate from July through September compared with the same time a year ago -- the fastest economic growth in two years.

It was the last reading on economic growth before the election, and it came as welcome news: Growth was sluggish in the first half of the year, averaging just above 1%.

American shoppers continued to drive growth while business spending was less of a drag. Consumer confidence hit a nine-year high in September, according to the Conference Board.

Working against growth for much of the year was that businesses had lots of unsold items sitting in the back room. This factor, also known as inventories, didn't hold growth back in the third quarter.

Solid growth numbers help clear the way for the Federal Reserve to raise interest rates at the end of this year. Sluggish growth, and a bad jobs report in May, held the Fed back from raising rates earlier this year, among other reasons. The Fed is expected to raise rates in December.