Economy jumped 4.1 percent in third quarter

The economy grew at a 4.1 percent annualized rate from July through September, the fastest rate in nearly two years, according to revised figures released by the Commerce Department on Friday.

That’s a significant upward revision from the 3.6 percent estimate that was given earlier in December, and a huge boost from the 2.5 percent rate that was the Commerce Department’s initial figure.

{mosads}It also suggests the economy picked up a lot of steam from earlier in the year. Commerce estimated the economy grew at a 2.5 percent clip in the second quarter.

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.

The White House has been touting economic growth under President Obama, and the report gives it something more to shout about ahead of the midterm elections next year.