U.S. Q3 real GDP growth upwardly revised to 3.3 pct from first estimate

The real GDP growth of U.S. was upwardly revised from its earlier estimate as expected. The GDP growth was revised to an annualised rate of 3.3 percent from its previous estimate of 3 percent growth. Stronger business investment, which was revised up from 3.9 percent to 4.7 percent growth was partially responsible for the upward revision of the headline figure. Spending on equipment was revised up from 8.6 percent to 10.4 percent, while investment in intellectual property was upwardly revised from 4.3 percent to 5.8 percent. These upward revisions more than countered a downgrade to spending on structures.

Meanwhile, government spending was upwardly revised from a drop of 0.1 percent to a rise of 0.4 percent. Investment in inventories added 0.8 percentage points to the third quarter economic growth, slightly above the 0.7 percentage point contribution in the earlier estimate.

On the other hand, consumer spending was downwardly revised from 2.4 percent to 2.3 percent. This is not much of a concern as household spending was held back in several regions by hurricane activity. Residential investment subtracted less than thought earlier, contracting 5.1 percent, noted TD Economics in a research report.

Corporate profit growth rose in the third quarter by USD 91.6 billion after rising 2.8 percent in the prior quarter. Financial corporations totally drove this rise.

The data released today affirm that the U.S. economy has had consecutive quarters of above 3 percent growth for the first time in three years. To a certain degree, the strength in third quarter borrows slightly from the fourth quarter, where the economic growth is expected to ease a bit to around 2.5 percent, stated TD Economics.

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