The U.S. economy grew at a rate of 2.6 percent in the third quarter>>

The U.S. economy grew at a rate of 2.6 percent in the third quarter, marking a resumption of growth that can extend into 2011 as business and consumer confidence to win to pass.

The revised gain in gross domestic product compares with an estimate of 2.5 percent issued last month , the Commerce Department figures showed today day. Stocks rose more than initially reported, while the increase in household purchases was revised downward.

revenue growth, continued tax cuts Bush-era and an improved labor market may encourage Americans to increase their spending, which accounts for about 70 percent of the world's largest economy. Today's figures showed a measure of inflation rose at the slowest pace in more than 50 years, underscoring the Federal Reserve's strategy of expanding the monetary stimulus registration.

Today's figures provide the basis for "a steady pace of growth" in 2011, said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia. The lack of "inflation remains the biggest risk to the downside for the U.S. economy" and GDP growth at this rate "is not enough to move the unemployment significantly," he said.

economists' forecasts ranged from gains of 2.5 percent to 3.3 percent. Today's report is the third and last for the quarter after a 1.7 percent pace in the last three months.

The index futures fluctuated after the report. The March contract, 500 of Standard & Poor's raised less than 0.1 percent to 1,251 at 8:49 am in New York. Treasuries were little changed, with the note reference to 10 years producing 3.31 percent, the same as yesterday afternoon.

Promote forecasts

In the past two weeks, economists have raised forecasts for growth in the fourth quarter after the government reported better than projected retail sales in November and Obama's government reached agreement with Congressional Republicans extend the tax cuts implemented by former President George W. George W. Bush.

JPMorgan Chase & Co., chief U.S. economist Michael Feroli December 14 revised its estimate of fourth-quarter growth at a rate of 3.5 percent from a previous estimate of 2.5 percent.

The economy has been growing fast enough to reduce the unemployment rate, currently at 9.8 percent and a concern for policy makers at the Fed's central bank's Open Market Committee reiterated on 14 December his promise to leave interest rates low for a "prolonged period" and maintained a program of 600 billion U.S. dollars to buy Treasury until June.

Lower inflation

Inflation is also lower than expected policy makers in the long term. preferred price gauge the Fed, which is tied to consumer spending and excluding food costs and energy, rose at a rate of 0.5 percent per year, the slowest since records began in 1959, Today's report showed.

In his statement last week, Fed officials said that inflation measures "have continued the downward trend."

Today's report showed that consumer spending rose at a rate of 2.4 percent last quarter, the fastest since the first three months of 2007, while less than 2.8 percent estimated last month. The added expense 1.67 percentage points of GDP between July and September.

figures for household spending in November, for tomorrow, may show an increase of 0.5 percent after increasing 0.4 percent in October.

Ford sales

Ford Motor Co., most profitable automaker in the world, said Dec. 20 that sales of U.S. cars in December are running at a rate of 12 million units annually, the third consecutive month at that pace or faster.

Dearborn, Ford's sales in Michigan, provides an increase of nearly 13 million next year. Sales in U.S. rose 21 percent in the first quarter this year, 11 months, led by deliveries to fleet customers. The company expects retail customers to support next year's earnings, said George Pipas, Ford sales analyst.

"We have a high degree of confidence that 2011 will be a strong sales year," Pipas said in a briefing with reporters. "We are much better than they were a year ago."

A larger gain in inventories added more to growth than the Commerce Department estimated last month.

The need to replenish inventories, one of the main drivers of economic recovery, may decrease in coming months as companies seek to maintain the reserves more in line with demand. The value of unsold goods increased by 121.4 billion U.S. dollars in the third quarter, compared with a previously reported 111.5 billion U.S. dollars.

Trade deficit

The trade deficit was revised to 505 billion U.S. dollars to 506.7 billion U.S. dollars, today's report showed. The deficit subtracted 1.7 percentage points of growth.

Excluding trade and inventories, a measure of underlying demand, the economy would have grown at a rate of 2.6 percent after expanding 4.3 percent in the second quarter. The Commerce Department last month estimated a rate of 2.9 percent of final sales to domestic purchasers named in the third quarter.

business spending on new equipment as well as export demand to support production. Business purchases of equipment and software grew at a rate of 15.4 percent last quarter, revised from 16.8 percent and after a jump of 24.8 percent for the second quarter was the highest in 27 years. Spending on structures, including office buildings and factories fell 3.5 percent.

"We have now seen a long period of recovery in the components business," said Paul Reilly, CFO of Arrow Electronics Inc., earlier this month at a conference in New York. Melville, New York, Arrow is a distributor of electronic components and computer products to industrial customers.

Corporate profits rose 1.6 percent, revised gain of 2.8 percent estimated last month, today's report showed. They were 26 percent over the same period last year.