Rapid US economic growth persists

President Bush has been praising the economy's performance

The US economy has continued to grow quickly despite the impact of hurricanes and record high oil prices.

The Department of Commerce said that gross domestic product (GDP) increased by an annual rate of 4.1% in the three months to the end of September.

That was the fastest rate of growth since the first quarter of 2004, and up from 3.3% in the previous three months.

Consumer demand - which has been helped by discounting - was the key driver, along with business investment.

'Big theme'

Consumer spending, which accounts for nigh on two-thirds of economic activity, increased by more than 4% during the third quarter, up from 3.4% in the previous three month period.

On the negative side, growth in the third quarter was less than had been initially predicted and corporate earnings slid as companies had to meet the cost of hurricanes Rita and Katrina.

Many analysts are predicting that growth is likely to slow to around 3% in the fourth quarter as firms, especially in the car industry, offered fewer discounts.

"The big theme in the fourth quarter is going to be consumption spending, that is the real driver," said Elisabeth Denison, an economist at Dresdner Kleinwort Wasserstein.