U.S. economy grows 3.6% in Q3, faster than previously estimated
2013-12-06 16:20:00
Reflecting upward revisions to private inventory investment and non-residential fixed investment, the Commerce Department released a report on Thursday showing that U.S. economic activity grew by much more than previously estimated in the third quarter of 2013.
The Commerce Department said U.S. gross domestic product increased by an upwardly revised 3.6 percent in the third quarter compared to the initial estimate of 2.8 percent growth. Economists had expected the pace of GDP growth to be revised to 3.1 percent.
With the upward revision, the pace of growth in the third quarter reflects a notable acceleration from the 2.5 percent growth seen in the second quarter.
"Whilst this looks like a great number, the reality, just like the first release, is that inventories provide the bulk of the increase," said Rob Carnell, chief international economist at ING.
The report showed that the change in real private inventories added 1.68 percentage points to third quarter GDP growth, double the initial estimate.
Carnell said, "This is likely to be unsustainable, and demand (real final sales) excluding inventories is actually a little weaker than it was even in the first release (1.9% vs. 2.0%)."
The Commerce Department said the upward revision to the pace of GDP growth was partly offset by a downward revision to exports and an upward revision to imports, which are a subtraction in the calculation of GDP.
The report also showed that the pace of consumer spending growth was downwardly revised to 1.4 percent compared to the initial estimate of 1.5 percent and the 1.8 percent growth seen in the second quarter.
"As with the first release, the headline number may suggest en earlier taper, perhaps December or January, but more digging into the data suggests that this economy is still running at only about an underlying 2-2.5% rate, and an earlier scheduling of the taper is far from obvious," Carnell said.
The Commerce Department said its reading on core consumer prices, which exclude food and energy prices, rose by 1.5 percent in the third quarter, reflecting a modest upward revision from the previously reported 1.4 percent growth.