Third Quarter GDP Growth Revised Down to 4.9%

The economy grew at an annual pace of 4.9 percent in the third quarter, the U.S. government said Thursday in its third estimate of economic growth in the July through September period.

This was slower than the previous estimate of 5.2 percent growth but is still the fastest rate of expansion in a decade not counting the spring back from the pandemic lockdowns.

The figures are adjusted for inflation. In nominal terms, the economy grew at an annual rate of 8.5 percent.

Consumer spending, which accounts for around 70 percent of gross domestic product, rose at an annual pace of 3.1 percent. That is lower than the four percent estimated in prior reports.

Business investment expanded an annual rate of 2.6 percent, a strong pace.

The personal consumption expenditures (PCE) price index increased 2.9 percent, a pick-up from the 2.5 percent rise in the second quarter. The PCE price index is used by the Federal Reserve for its target of two percent inflation.

Core PCE inflation, a measure that excludes food and energy prices, rose 2.4 percent, down from 3.7 percent in the second quarter.
The economy appears to have slowed in the final quarter of the year. The Atlanta Fed’s GDPNow real-time economic barometer currently reads the economy growing at a 2.7 percent pace.