Economic growth grinding higher

The pick-up in GDP growth to 2.8% annualised in the third quarter, from 2.5% in the second, suggests that as the fiscal drag fades, the recovery is strengthening. On the whole, the latest monthly data also point to an acceleration. Manufacturing output growth is still weak, but underlying retail sales growth has strengthened and employment growth is picking up. Nevertheless, the evidence is hardly conclusive. It is questionable whether it will be sufficient to persuade the Fed to taper its asset purchases next month. November's labour market data could tip the balance one way or the other.