The U.S. economy grew in the third quarter at an even faster pace than originally reported, the government said Tuesday.
Gross domestic product (GDP), the broadest measure of economic activity, grew at an 8.2 percent annual rate, the fastest pace since the first quarter of 1984, after growing at a 3.3 percent pace in the second quarter, the Commerce Department reported.
Originally, GDP growth was reported at a 7.2 percent annual rate. Economists, on average, expected the reported growth rate to be revised to 7.6 percent, according to Briefing.com.
The report had little impact on U.S. stock market futures, which continued to point to a higher opening on Wall Street. Treasury bond prices fell.
One key reason for the large upward revision in third-quarter GDP was a re-evaluation of the rate of change in business inventories in the quarter. Originally, the government said businesses cut inventories by $35.8 billion in the quarter, but that figure was trimmed to $14.1 billion in the latest report.
The lower rate of shelf-clearing in the third quarter could mean the economy will get less of a boost from re-stocking in the fourth quarter than some economists had hoped.
Third-quarter growth was also boosted by a 6.4 percent pace of growth in consumer spending after growing at a 3.8 percent rate in the second quarter. Consumer spending growth was originally reported as 6.6 percent.
Much of the strength in consumer spending in the third quarter was due to a 26.5 percent rate of growth in the sale of durable goods, items meant to last three years or more, and much of that came in sales of motor vehicles and parts.
Home sales also soared, with residential investment up at a 22.7 percent annual pace, compared with 6.6 percent in the second quarter.
Nonresidential fixed investment rose at a 14 percent rate following the second quarter’s 7.3 percent pace, a sign of further strength in business spending. Investment in equipment and software rose 18.4 percent, nearly double the prior quarter’s pace.