The economy grew at a 3.5% pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. The Commerce Department's report today delivered the strongest signal yet that the economy entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.
The much-awaited turnaround ended the streak of four straight quarters of contracting economic activity, the first time that's happened on records dating to 1947. It also marked the first increase since the spring of 2008, when the economy experienced a short-lived uptick in growth. The third-quarter's performance—the strongest since right before the country fell into recession in December 2007—was slightly better than the 3.3% growth rate economists expected.