U.S. third-quarter growth revised up to 2.6%; inflation stays tame

[Modbert]

U.S. third-quarter growth revised up to 2.6% Economic Report - MarketWatch

WASHINGTON (MarketWatch) — The U.S. economy expanded at a 2.6% pace in the third quarter, slightly faster than previously reported, mainly because of a higher inventory buildup, according to the latest government data.

Last month, the Commerce Department pegged growth in gross domestic product for the third quarter at an annualized rate of 2.5% on a seasonally adjusted basis. The final third-quarter report released Wednesday incorporates data not immediately available in two earlier readings of growth in GDP.

For the last three months of 2010, economists predict the economy will register growth of 3.0%. They also forecast a similar rate of growth in the first two quarters of 2011, according to the MarketWatch survey.

Yet unless the U.S. grows even faster, they warn, the nation’s 9.8% unemployment rate is unlikely to fall fast enough to put millions of idled Americans back to work anytime soon.

While consumers spent less in the third quarter than previously believed, they bought the most goods and services since the recession ended. Consumer spending rose by 2.4% instead of the 2.8% as reflected in the government’s prior report.

Still, this marked the highest level for consumer spending — the single largest source of U.S. economic growth — since early 2007.

Inflation, for its part, was very tame. Prices for gross domestic purchases increased by an annualized 0.8%, down from a previous reading of 1.0%.

Well it's good to see consumers are spending at such a high level. Hopefully this is a sign of confidence in the economy and a sign of things to come.

 

[Revere]

That's a coma.