The U.S. Census Bureau reported Friday morning that its third estimate of third-quarter U.S. gross domestic product (GDP) rose at an annual rate of 4.1%. That was sharply higher than the 2.5% growth rate for the second quarter and better than the second estimate issued two weeks ago calling for an increase of 3.6%. The Census Bureau said that the jump was due to larger personal consumption expenditures (PCE) and nonresidential fixed investment.

The short version: U.S. consumers are spending again. Real PCE rose 2% in the third quarter, up from 1.8% in the second quarter. Spending on durable goods rose nearly 8%, and spending on nondurable goods increased by nearly 3%. Both are improvements over the second quarter. Spending on services rose 0.7%, lower than the 1.2% second-quarter increase.

The big jump in nonresidential fixed investment came in intellectual property products, which saw a gain of 5.8% in the third quarter compared with a drop of 1.5% in the second quarter. The intellectual property products category includes sales and licensing of patents, copyrights, and trademarks, as well as R&D expenditures and the sale of such products as software, music, video and books to individuals or businesses. The largest increase among these products was software, up 0.14% followed by a 0.08% bump in R&D.

Spending on gasoline and energy rose 2.1%, and health care spending rose 12%. Neither is particularly good news for the economy, but it is worth noting that the health care increase is the much smaller than the 15.4% increase in the second quarter and way below the 45.1% increase for all of 2012. The jump in spending on energy means that Americans have less money to spend on discretionary items, which tends to weigh on the overall economy.

The outlook for the fourth quarter is for GDP to rise by 2.1%, a substantial drop from this latest report on the third quarter. The projected decline reflects concerns that the goods that businesses bought to meet holiday shopping demand did not get sold. Given the relatively weak showing so far in holiday sales, this looks more and more like a real concern.

Equity futures spiked following the GDP report, but pulled back some from earlier highs. Nasdaq futures were up 0.25%, S&P 500 futures were up 0.22% and Dow futures were up 0.12% about 15 minutes before trading begins on Friday.

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