US third quarter GDP revised down to an annualised 2%
Updated : 15:58
The final estimate of third quarter US gross domestic product was revised lower on Wednesday, the Commerce Department revealed.
US GDP rose an annualised 2% in the third quarter, according to the third and final estimate of economic growth. It marked a downward revision from the second estimate of 2.1% but better than analysts' expectations of 1.9%.
In the second quarter GDP increased 3.9%.
"The deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and decelerations in exports, in personal consumption expenditure (PCE), in nonresidential fixed investment, and in state and local government spending that were partly offset by a deceleration in imports," according to the Commerce Department.
The value of inventories rose $85.5bn, down from the previous estimate of $90.2bn. Inventories gained $113.5bn in the second quarter.
Spending on home construction jumped 8.2% in the third quarter, revised up from prior estimate of 7.3%.
US personal consumption gained 3% in the third quarter, in line with the previous estimate and beating forecasts for a 12.9% increase.
The core PCE index unexpectedly increased to 1.4% quarter-on-quarter in the third quarter from a prior estimate of 1.3%.
PCE is a measure of GDP and the Federal Reserve's preferred measure of inflation. The US central bank is targeting 2% inflation.
"Altogether, the third estimate of third quarter GDP does little to change the picture of solid domestic activity offset by weakness abroad, as final sales to domestic purchasers (GDP less trade and inventories) rose 2.9% in the quarter," said Barclays Research analysts.
"Soft global growth and the lagged effects of lower energy prices and a stronger dollar continue to weigh on trade and manufacturing, the latter of which we see as reflected in the slower pace of inventory accumulation as production is adjusted to meet the slower pace of sales. We look for this pattern of growth to be maintained in the fourth quarter."