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The US economy is strong, and it's about to get even stronger, Atlanta Fed model shows

Workers on the assembly line for gas turbines at the General Electric energy plant in Greenville, South Carolina.
Luke Sharrett | Bloomberg | Getty Images
Workers on the assembly line for gas turbines at the General Electric energy plant in Greenville, South Carolina.

You may not have noticed, but the U.S. economy is on a tear.

Or at least that's what an economic model at the Atlanta Federal Reserve is showing.

Based on recent economic data, the gross domestic product is headed for a 4.5 percent annualized growth pace in the fourth quarter, according to the Atlanta Fed's model, called GDP Now. That would be a sharp pickup from the third quarter, which the government's initial estimate pegged at a 3 percent growth rate.

The Atlanta Fed model looks at multiple, current measures of economic activity and uses them to forecast where the overall economy is headed.

The latest estimate for fourth-quarter GDP growth is much faster than the 2.9 percent rate the model showed Monday, the Atlanta Fed said. The improved outlook came even as data on U.S. factory output eased off a 13-year high in October.

The GDP Now forecast has roughly tracked the government's initial estimate of the U.S. economy. The Bureau of Economic Analysis will publish its next "advance" estimate on Jan. 27 for the last three months of this year.

But the bureau's final tally of the $19.5 trillion economy won't be out until March 30, and could be revised significantly by then.

In the meantime, those GDP forecasts are getting a close look from White House, Congress and the Federal Reserve.

The Trump administration has promised to spur GDP growth to 3 percent a year or more. Most economists private think a sustained 3 percent growth rate is optimistic.

Congressional Republicans are counting on faster economic growth to help make up for revenues lost to proposed tax cuts.

And officials at the Federal Reserve are keeping a close eye on growth as they nudge interest rates higher after nearly a decade of keeping rates slow to spur growth.

The Fed's rate setting committee met Wednesday to make the latest tweak in the federal funds rate, a key benchmark lending rate for banks.

WATCH: Bill Gross on flattening yield curve & the economy

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