US third quarter growth revised down to 2.8%

WASHINGTON (AFP) - – US economic growth in the third quarter was revised down to 2.8 percent, the Commerce Department said Tuesday, cutting its earlier estimate of a 3.5 percent pace of expansion.

The growth, despite the downward revision, marked the first expansion for the economy after four straight quarters of contraction, including a 0.7 percent drop in the second quarter.

The revision to gross domestic product (GDP), or the output of goods and services, reflected updated data showing a wider trade deficit and weaker consumer spending.

The data from the July-September period show the world's biggest economy appearing to emerge from its brutal recession, but with less momentum than previously thought.

The GDP revision was in line with analyst forecasts.

Personal consumption expenditures -- the main driver of economic activity -- increased 2.9 percent in the quarter, revised down from an estimate last month of 3.4 percent.

The revised figures showed exports of goods and services increased 17.0 percent in the third quarter, but imports grew at a faster pace of 20.8 percent, a factor that hurts GDP.

Other segments of the economy remained weak, with business investment down 4.1 percent.

But the housing sector emerged from its slump, with residential fixed investment jumping 19.5 percent, in contrast to a plunge of 23.3 percent in the second quarter.

The report also showed corporate profits up 130.0 billion dollars in the third quarter.

Augustine Faucher at Moody's Economy.com said this was a jump of 10.6 percent at an annualized rate, and added, "this bodes well for near-term hiring and investment."

Most economists say the US recovery from its worst recession in decades appears to be on track, but could be derailed by rising joblessness. The unemployment rate hit a 26-year high of 10.2 percent in October, with a net loss of 190,000 jobs.