The economy in the U.S. expanded more than previously estimated in the third quarter as a narrower trade deficit and gains in inventory overshadowed a smaller gain in consumer spending.
Gross domestic product grew at a 2.7 percent annual rate, up from a 2 percent prior estimate, revised figures from the Commerce Department showed today in Washington. The median forecast of 82 economists surveyed by Bloomberg called for a 2.8 percent gain. Household purchases climbed at a 1.4 percent rate, the least in more than a year and down from a previously reported 2 percent rate, and income gains were also cut.
“Economic growth is very modest right now,” Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York, said before the report. “This is more or less the scenario we’re going to have over the course of 2013 as well.”
The report helps explain why Federal Reserve policy makers have said they’ll continue to pump money into the economy to spur growth and reduce joblessness. At the same time, an improvement in housing, employment gains and healthier household finances may help underpin consumer purchases, the biggest part of the economy.
Economists’ estimates for GDP, the value of all goods and services produced, ranged from 2 percent to 3 percent. The economy grew 1.3 percent in the second quarter.
Fewer Americans filed first-time claims for unemployment insurance payments last week as the labor market disruptions wrought by superstorm Sandy ebbed, a report from the Labor Department also showed today.
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