The U.S. economy is growing faster, corporate profits are rising and companies are laying off the fewest workers in six years.
The latest government reports point to economic momentum in the midst of the critical holiday shopping season.
“The momentum looks strong,” said Chris Rupkey, chief economist at the Bank of Tokyo-Mitsubishi.
Encouraging as the latest figures are, hopes for a robust finish to 2013 hinge on strong hiring. And that depends, in part, on what the government’s November jobs report shows when it is released today.
The recovery from the Great Recession that ended 41/2 years ago has come in fits and starts. Unemployment remains high at 7.3 percent. And growth has yet to reach the acceleration that defined U.S. economic recoveries for much of the past half-century.
Even Thursday’s government report that the economy grew at a robust annual rate of 3.6 percent from July through September hardly was cause for celebration.
Nearly half the growth came from businesses building up their stockpiles, a temporary factor. Excluding stockpiling, annual growth last quarter was a mere 1.9 percent.
Unless consumers step up spending during the holiday season, stockpiling is likely to slow.
Most economists foresee a sharp slowdown in growth during the October-December quarter as businesses do less stockpiling. Early estimates for economic growth are at or below an annual rate of 1.5 percent.
Paul Ashworth, chief U.S. economist at Capital Economics, cautioned that a drop in fourth-quarter growth might not necessarily signal a weakening economy. Ashworth noted that the report on third-quarter growth showed that business sales surged, corporate profits rose, income grew and Americans saved more.
The report adds “to the evidence that the recovery is gaining momentum,” Ashworth said.
To sustain that strength, the economy needs more jobs. Today, the government will show whether steady gains in hiring over the past few months continued in November.