U.S. Economy Grew More Than Initially Estimated In Third Quarter

Revised data released by the Commerce Department on Wednesday showed the U.S. economy grew by more than initially estimated in the third quarter.

The Commerce Department said real gross domestic product jumped by 2.1 percent in the third quarter compared to the previously estimated 1.9 percent increase. Economists had expected the pace of GDP growth to be unrevised.

With the upward revision, the GDP growth in the third quarter represents an acceleration from the 2.0 percent increase in the second quarter.

The stronger than previous estimated growth reflects upward revisions to private inventory investment, non-residential fixed investment, and consumer spending.

However, the report said the upward revisions were partially offset by a downward revision to state and local government spending.

The Commerce Department said the GDP growth in the third quarter reflected positive contributions from consumer spending, federal government spending, residential investment, private inventory investment, exports, and state and local government spending.

A negative contribution from non-residential fixed investment limited the upside along with an increase in imports, which are a subtraction in the calculation of GDP.

"Overall, we're still expecting economic growth to slow further in the near-term, but that slowdown appears to be more modest than we had initially expected," said Michael Pearce, Senior U.S. Economist at Capital Economics.

On the inflation front, the report said the annual rate of growth in core consumer prices crept up to 1.7 percent in the third quarter from 1.6 percent in the second quarter.