(Bloomberg) -- The US economy expanded at a faster pace in the third quarter than previously estimated, owing in part to to stronger consumer spending and exports.
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Gross domestic product increased at a 3.1% annualized rate in the July-to-September period, the third estimate of the figures from the Bureau of Economic Analysis showed Thursday. That compared to a previous projection of 2.8%.
Growth in consumer spending was marked up to 3.7% — the fastest since early 2023 — and exports also grew faster than previously estimated, both thanks to services.
The numbers reinforce the notion that the economy is still powering ahead despite expectations among forecasters for an eventual slowdown. The report comes just a day after the Federal Reserve triggered a stock-market selloff by signaling a slower pace of interest-rate cuts in 2025, in part premised on recent stronger-than-expected economic data.
The report also showed one of the Fed’s preferred inflation metrics — the personal consumption expenditures price index, excluding food and energy — was marked up slightly, to 2.2%. November PCE data is due Friday.
“This week’s data show the economy is set to end 2024 on a solid note, which is fortunate since we’ll have to contend with heightened policy uncertainty and possibly greater challenges in 2025,” Oren Klachkin, an economist at Nationwide, said in a note. “We think the Fed maintains an easing bias, but the bar for rate cuts just got higher.”
Other components that make up GDP, including business and residential investment and government spending, were also revised higher.
Applications for US unemployment benefits fell last week after spiking earlier this month, continuing a streak of volatility that often occurs during the holiday season, separate data Thursday showed. Overall, they remained subdued, hovering near pre-pandemic averages.
Another report Thursday showed existing-home sales in the US topped a rate of 4 million in November for the first time in six months as house hunters begrudgingly accepted mortgage rates above 6%.
(Updates with existing-home sales data in last paragraph.)
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