US third-quarter economic growth seen fastest in nearly 2 years

The Commerce Department's advance estimate of third-quarter gross domestic product on Thursday is also expected to show residential investment rebounding after nine straight quarters of declines. Business investment is believed to have slowed as the boost fades from the construction of factories. President Joe Biden's administration has taken steps to encourage more semiconductor manufacturing in the U.S.

"We're seeing the exact opposite ," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto."The American consumer, the biggest engine of the U.S. economy seems to have had a mid-year resurgence, largely because confidence improved through the summer because of the rally in the stock market and steadier gasoline prices."

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was likely the main driver, with Americans buying long-lasting goods like motor vehicles as well as going to concerts. Spending on goods appears to have picked up considerably because prices have come down. As a result, some economists see a sharp slowdown around the corner. Others are not too concerned, noting the labor market continues to churn out jobs at a solid clip.

The GDP data probably will not affect near-term monetary policy as financial conditions have already tightened with U.S. Treasury yields surging while the stock market sold off.

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