The U.S. economy expanded further during the third quarter of the year, but not as much as some analysts were hoping.

The nation's Gross Domestic Product grew at an annual rate of 3.1% in the third quarter of the year, more than twice the poor showing of the 1.3% annual rate that was recorded during the previous quarter.
The GDP is the broadest measure of the U.S. economy and gauges the total output of all goods and services within the country.
Helping drive the expansion was healthy consumer spending, especially for new cars and homes. Consumer spending increased at an annual rate of 4.2% compared to a 1.8% rate in the third quarter of the year.
Newport Communications Senior Economist Jim Haughey said spending at the beginning of the fourth quarter started at close to the third quarter average and may slow to around 2%. "This will make the 2002 rise about 2.5%, with a 3.2%-3.5% pickup now expected next year," he said.
Despite the better showing during the third quarter, the increase was down from what Wall Street analysts were predicting. They forecasted a 3.6% increase and note the less than expected increase may foreshadow weaker growth in the final quarter of the year.
The latest report on the GDP provided a couple of brighter spots. Most notably, spending on factories and equipment increased for the first time in two years.
Within that category, spending on equipment and software increased for a second consecutive quarter during the July-September period, rising at its fastest pace since the second quarter of 2000. Inflation was not a concern during the third quarter, increasing at a 1.9% annual rate compared to a 2.7% annual increase in the second quarter.
In contrast, businesses added to inventories at a $1.9 billion annual rate in the third quarter, slower than the second quarter's $4.9 billion rate.