US economy grows at fastest pace in two years

The US economy picked up speed over the three months to September, as consumer spending jumped and exports increased.

The world’s largest economy expanded at an annual rate of 4.3%, up from 3.8% in the previous quarter. That was better than expected, and marked the strongest growth in two years.

The figures offer a clearer picture of the state of the US economy heading into the end of the year, after data collection had been delayed by the US government shutdown.

The report showed consumer spending rising at an annual rate of 3.5%, compared with 2.5% in the previous quarter, despite a slowing job market and frustration about inflation.

Growth this year has been buffeted by dramatic changes to trade and immigration policies, as well as cuts to government spending.

But while that has led to sharp swings in some areas, such as imports and exports, the underlying economy has maintained solid momentum.

Analysts said the pick-up in consumer spending in the third quarter of the year was driven by more being spent on health care services.

Imports – which count against growth – continued to decline, reflecting the wave of taxes on shipments entering the US that President Donald Trump announced this spring.

Meanwhile exports, which had dropped sharply, bounced back, surging by 7.4%.