Has the economy finally - finally(!) - turned the corner?

The upward revision of GDP by the Commerce Department for the third quater, from 3.6% to 4.1% may be a signal of more normal growth in the coming years.

The original estimate of 2.5% in October was raised earlier this month and then raised again on Friday. While it still is only one quarter, the more robust number comes on the heels of improving news in the employment sector - a sign that the growth may continue into next year.

The Hill:

The news comes two days after the Federal Reserve said it would begin pulling back on the stimulus it has provided the economy. Starting in January, the Fed will ease its bond purchases by $10 billion per month, to $75 billion.

The new growth estimates could lead to greater tapering by the Fed going forward.

It might also stem calls for an extension of federal unemployment benefits, something the White House and congressional Democrats have demanded.

The extension was not included in the budget deal approved by Congress, in part because of concerns about the cost. Republicans have also argued such stimulus is less necessary if the economy is growing.

The boost was driven by significant increases in the estimates of consumer and business spending. Business spending rose at a 4.8 percent rate, well above the 3.5 percent estimate given two weeks ago. Consumer spending, meanwhile, rose by 2 percent instead of 1.4 percent.

The figure is well above estimates by economists, who expected the third and final revision to be unchanged from the last one.

The last time the economy grew as quickly was in the 4th quarter of 2011, when the growth rate was 4.9 percent. It is the second-best quarter since the end of the 2008-09 recession.

Unknown at this point is any negative effect that Obamacare will have on the economy. Increases in premiums are going to mean less disposable income for consumers. That alone may put a crimp in consumer spending going forward.

It's still too early to convince the 67% of Americans who believe we're still in a recession that we've turned the corner on the economy. But perhaps by this time next year, the crisis will have eased and more Americans will be able to celebrate a happy and prosperous Christmas.

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