A few hours after the US Congress passed a tax bill backed by President Donald Trump, economic results showed US economy grew at its fastest pace in more than two years in the third quarter, powered by robust business spending, and is poised for what could be a modest lift next year from sweeping tax cuts passed by Congress this week.
Gross domestic product expanded at a 3.2 percent annualized rate last quarter, the Commerce Department said in its third GDP estimate for the period. Although that was slightly down from the 3.3 percent reported last month, it was the quickest pace since the first quarter of 2015 and was a pickup from the second quarter’s 3.1 percent growth rate.
It also was the first time since 2014 that the economy enjoyed growth of 3 percent.
Despite the increase in the number of Americans applying for unemployment benefits, more than what was expected last week, the general atmosphere was still pointing to a strong labor market.
In a separate report, the Labor Department said initial claims for state unemployment benefits rose 20,000 to a seasonally adjusted 245,000 for the week ended Dec. 16.
Last week marked the 146th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was smaller, Reuters reported.
Energy .SPNY and financial .SPSY stocks led gains among the 11 major S&P sectors.
Financials have gained 21 percent this year, compared with a 20 percent gain for the S&P 500.