(Bloomberg)—The U.S. economy expanded more than previously reported last quarter on bigger contributions from a range of factors including services spending, intellectual property and construction by state and local governments.
Gross domestic product rose at a 3.5 percent annualized rate in the three months ended in September, compared with a prior estimate of 3.2 percent, Commerce Department figures showed Thursday. The median forecast in a Bloomberg survey called for a 3.3 percent gain.
The revised growth estimate, still the fastest in two years, reflected updated figures on research and development expenses from companies, spending by nonprofit institutions and use of financial services. The economy is unlikely to sustain such a pace in the final three months of the year, instead probably growing at a 2.2 percent rate, according to the median projection of analysts surveyed by Bloomberg earlier this month.
Economists’ projections for the updated advance in third-quarter GDP, the value of all goods and services produced in the U.S., ranged from 2.8 percent to 3.5 percent. This is the last of three estimates for the quarter before annual revisions in July.
Household purchases, which account for almost 70 percent of the economy, grew at a 3 percent annualized rate, stronger than the 2.8 percent pace previously estimated. That change reflected primarily higher spending on services by incorporating newly available data from the Census Bureau, according to the report.
Estimates of the contributions to growth by trade and inventories were little changed. Stripping out those items, the two most volatile components of GDP, so-called final sales to domestic purchasers increased at a 2.1 percent rate, compared with the prior estimate of a 1.7 percent pace.
Corporate spending on equipment decreased at a 4.5 percent annualized pace in the third quarter, compared with the 4.8 percent drag previously estimated, and subtracted 0.3 percentage point from growth, the report showed. Those outlays had declined 2.9 percent in the prior three months.
The government’s report on fourth-quarter GDP is due Jan. 27.
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