The Commerce Department released a report on Wednesday that showed the U.S. economy grew at an even faster rate than previously indicated in the third quarter. This was due to higher government spending and better-than-expected business investment.
According to the department’s second estimate, the gross domestic product—a measure of all goods and services produced during the three-month period—accelerated at a 5.2% annualized pace. The acceleration exceeded the first 4.9% reading and the 5% prediction of Dow Jones’ panel of economists.
Increases in nonresidential fixed investment, which includes buildings, machinery, and intellectual property, were the main cause of the upward revision.
Even though the category saw a 1.3% increase, it still represented a significant decline from prior quarters.
The Q3 estimate was also enhanced by government spending, which increased 5.5% from July to September.
Consumer spending, however, saw a downward revision, rising just 3.6% as opposed to the initial estimate of 4%.
Regarding inflation, there were conflicting reports. The Federal Reserve keeps a close eye on the personal consumption expenditure price index, which rose 2.8% during the period and was revised downward by 0.1 percentage points. On the other hand, the chain-weighted price index rose 3.6%, signifying an increase of 0.1 percentage points.
During that time, corporate profits increased by 4.3%, a significant increase from the 0.8% gain in the second quarter.
