GDP Revised Up; Eyes Now On Jobs, FOMC

ByJohn S. McClenahen In the wake of revised third-quarter GDP figures, attention is now turning to the November job figures and the Federal Open Market Committee's (FOMC) next scheduled meeting on Dec. 14. The U.S. Commerce Department reported Nov. 30 that GDP, the broadest measure of economic activity, grew at an annual rate of 3.9% from July through September, two-tenths of a percentage point higher than the 3.7% initially estimated. Higher consumer spending along with greater government spending, more spending on computers and software, and a higher level of exports accounted for much of the revised rate of GDP growth, the department said. The U.S Labor Department is slated to release November employment numbers on Dec. 3. The consensus forecast has 200,000 jobs being added to nonfarm payrolls this month. Although above the figure needed to keep up with population growth, it would be well below the 337,000 jobs the department says were created in October. Economists now expect the FOMC to raise the influential federal funds target rate by another 25 basis points -- to 2.25% -- at the panel's next meeting two weeks from now. It would be the fifth increase in the target rate, which is the interest banks charge each other on overnight loans, since June of this year.