U.S. GDP grew at a 5.2% rate in the third quarter, even stronger than first indicated

 

U.S. GDP grew at a 5.2% rate in the third quarter, even stronger than first indicated

The U.S. economy grew at an even stronger pace then previously indicated in the third quarter, the product of better-than-expected business investment and stronger government spending, the Commerce Department reported Wednesday.

Gross domestic product, a measure of all goods and services produced during the three-month period, accelerated at a 5.2% annualized pace, the department’s second estimate showed. The acceleration topped the initial 4.9% reading and was better than the 5% forecast from economists polled by Dow Jones.

Primarily, the upward revision came from increases in nonresidential fixed investment, which includes structures, equipment and intellectual property. The category showed a rise of 1.3%, which still marked a sharp downward shift from previous quarters.

Government spending also helped boost the Q3 estimate, rising 5.5% for the July-through-September period.

However, consumer spending saw a downward revision, now rising just 3.6%, compared with 4% in the initial estimate.

There was some mixed news on the inflation front. The personal consumption expenditures price index, a gauge the Federal Reserve follows closely, increased 2.8% for the period, a 0.1 percentage point downward revision. However, the chain-weighted price index increased 3.6%, a 0.1 percentage point upward move.

Corporate profits accelerated 4.3% during the period, up sharply from the 0.8% gain in the second quarter.

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