Gross Domestic Product Up 2% in Third Quarter

Washington, DC, Oct. 29, 2010 -- Gross Domestic Product grew at an annual rate of 2% in the third quarter, according to the Commerce Department, mostly on the back of consumer spending.

The growth marked an improvement from the 1.7% growth in the April-June quarter.

Consumers helped boost last quarter's economic growth with 2.6% growth in spending. That was better than the second quarter's 2.2% growth rate and marked the biggest quarterly increase since a 4.1% gain at the end of 2006 before the recession hit.

Businesses also played a role in the economy's slightly better performance during the July-September quarter.

They boosted spending on equipment and software at a 12% annualized rate, although that was roughly half the pace seen in the prior quarter. And companies increased spending on commercial construction projects, such as office buildings and factories, for the first time in more than two years. Such spending grew at a 3.9% pace in the third quarter.

However, companies slashed spending on housing projects at an annual pace of nearly 30%.

According to some experts, the economy would need to expand by 5% for a full year to knock the jobless rate down by a full percentage point.