Washington, DC, Dec. 23--The government left its estimate for third-quarter gross domestic product growth unchanged in a final reading.
But consumer spending was stronger than previously thought, recording its highest quarterly growth in 17 years GDP, which is a measure of all the goods and services produced in the U.S., held at an 8.2% annual growth rate, the Commerce Department reported Tuesday. This final reading, which reinforced that the economy put in its best showing in nearly 20 years during the quarter, was based on more complete data than were available last month. The growth rate was on target with a forecast from economists surveyed by Dow Jones and CNBC.
The Commerce Department also revised its measure of after-tax profits to 10.1%, down from an earlier reading of 10.6%. Profits rose at 13.8% pace in the second quarter.
Consumer spending, which accounts for two-thirds of economic activity, rose at a 6.9% annual rate during the quarter, the best showing since the third quarter of 1986. That was higher than the previous estimate of 6.4%, and the second quarter's 3.3% growth rate.
Consumers' spending increased for both durable and nondurable goods. Outlays on durables, items such as cars that are meant to last at least three years, shot up 28%, higher than the previous estimate of 26.5%. Spending on nondurables rose by 7.3%, slightly lower than the the 7.6% increase previously thought.
Business spending advanced by 12.8%. Outlays were revised down from a previously estimated 14% increase. Second-quarter business investment rose 7.0%. Third-quarter equipment and software spending climbed by 17.6%, revised down from a previously estimated 18.4%.
Businesses reduced inventories by $9.1 billion, after decreasing supplies $4.5 billion in the second quarter. The change in inventories subtracted 0.13 of a percentage point to GDP growth.
The $9.1 billion figure was lower than the prior estimate by the government, which had said companies pared stocks by $14.1 billion in the third quarter.
Real final sales of domestic product--that is, GDP less the change in private inventories--rose at an 8.3% annual rate. That figure was revised from the originally reported increase of 8%. Second-quarter real final sales climbed at a 3.3% annual rate.
Exports climbed by 9.9% in the third quarter, while imports advanced by 0.8%. Commerce earlier reported exports rose 11.0% and imports went up 1.5% Second-quarter exports went down 1.1% and imports rose 9.1%.
Federal government spending increased by 1.2%, revised up from an earlier estimated 0.4% decline. Federal outlays shot up 23.5% in the second quarter.
State and local government spending climbed 2.1% in the third quarter, revised down from a previously reported 2.3% climb.
