US economy grew at a scorching 5 percent annual rate last quarter

1. The Commerce Department announced Tuesday morning that the US economy grew at a 5 percent annual rate in the third quarter, revised up from a previous estimate of 3.9 percent.
2. In the second quarter, GDP grew at a 4.6 percent annual rate.
3. That makes mid-2014 by far the best run of economic growth the US has enjoyed in years.
4. The excellent November jobs report suggests that the good news has likely extended into the fourth quarter.

More good news to come

Nothing about the future is certain, of course. But it's worth emphasizing that this is news about the third quarter which ended in September. In other words, this is economic news from before the big drop in oil prices — something that is almost universally expected to boost the American economy. That means all else being equal we should expect to see some new sources of strength in the 4th Quarter.

Peering beneath the hood of the Q3 numbers, there's nothing funny happening with inventories or anything that would cast that into doubt. Real final sales of domestic product also grew at 5 percent, and inflation was subdued, so this growth looks sustainable at least in the short term.

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