Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 3.9 percent in the third quarter of 2007,
according to advance estimates released by the Bureau of Economic Analysis. In the second quarter,
real GDP increased 3.8 percent.
The increase in real GDP in the third quarter reflected positive contributions from personal
consumption expenditures (PCE), exports, federal government spending, equipment and software,
nonresidential structures, private inventory investment, and state and local government spending that
were partly offset by a negative contribution from residential fixed investment. Imports, which are a
subtraction in the calculation of GDP, increased. The US economy is growing strongly. No need for
rate cut
Federal Reserve Chairman Ben Bernanke and his colleagues were wrapping up a two-day meeting Wednesday and many economists believe they will announce that they have decided to follow September's half-point cut in the federal funds rate with a quarter-point cut at this meeting.
"They are going to cut rates," predicted Mark Zandi, chief economist at Moody's Economy.com. "The economy is weakening and financial markets remain unsettled."
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