The payment: The US expanded at an annual rate of 3.2% in the third quarter, a more robust pace of growth than previously reported, new government figures show.
The latest revision paints a picture of an economy that is expanding steadily and at a slower pace than last year, but is not on the brink of recession.
Gross domestic product growth, the official scorecard for the economy, was originally reported at 2.6% and was updated to 2.9% last month.
GDP had contracted for the first two quarters of the year, but mostly for technical reasons based on the composition of the report rather than underlying economic weakness.
The economy is also expected to start growing again in the last three months of the year, with estimates ranging from 1% to 3%. All figures are adjusted for inflation.
Key data: The economy’s main driver, consumer spending, rose a solid 2.3% a year in the third quarter, the government said. The increase was previously estimated at 1.7%.
Upward revision of consumer spending was largely responsible for stronger GDP pressures in the third quarter.
However, the largest contribution to growth in the third quarter came from a sharp decline in the trade deficit. Smaller deficits contribute to GDP.
Other segments of the economy were significantly weaker. Business investment, for example, fell, with the housing market being particularly hard hit as higher mortgage rates took their toll.
Corporate earnings in the third quarter were not as weak as originally reported. Adjusted pre-tax earnings remained unchanged instead of falling by 1.1%.
Most of the other numbers in the report have barely changed. GDP is updated twice after the first results are published. This was the second update.
Big picture: The economy is still growing towards the end of the year, but 2023 is likely to prove more challenging.
The Federal Reserve is poised to raise interest rates to their highest levels in at least 15 years to tame severe inflation, but it risks slowing the economy enough to tip it into recession.
Market reaction: The Dow Jones Industrial Average DJIA, +1.60%, and the S&P 500 SPX, +1.49% were expected to open lower in Thursday trading.
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