Economy grows at slightly faster pace in Q3

The operative phrase is spent a little more freely.

Private and government (Federal, State & Local) consumption account for 70% and 20% of GDP, respectively. This means that 90% of US GDP comes from a combination of private and public consumption. While some will argue that government consumption expenditures and gross investment also contains "investment", it is nowhere near as efficient and productive as private sector investment. Private sector investment has fallen to 13% as of the third quarter 2010. This is well below the 50's, 70's and 80's highs that exceeded 20%.

Personal Consumption Expenditures (PCE) As A %GDP and Personal Consumption Expenditures As A %GDP Average from 1947:


Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP Average from 1947:


Gross Domestic Private Investment (GDPI) As A %GDP and Gross Domestic Private Investment (GDPI) As A %GDP Average from 1947:

The economy grew at a slightly faster pace over the summer as Americans spent a little more freely.

The Commerce Department said Friday that the economy expanded at a 2 percent annual rate in the July-September quarter. It marked an improvement from the feeble 1.7 percent growth in the April-June quarter.

Source: finance.yahoo.com