U.S. GDP Growth Unexpectedly Downwardly Revised To 3.4% In Q3

Reflecting downward revisions to consumer spending and exports, the Commerce Department released a report on Friday showing slightly slower than previously estimated U.S. economic growth in the third quarter.

The report said real gross domestic product surged up by 3.4 percent in the third quarter compared to the previously estimated 3.5 percent jump. The pace of GDP growth had been expected to be unrevised.

The increase in consumer spending, which accounts for about 70 percent of the economy, was downwardly revised slightly to 3.5 percent from 3.6 percent.

Revised data also showed exports plummeted by 4.9 percent in the third quarter after surging up by 9.3 percent in the second quarter.

The Commerce Department said the downward revisions to consumer spending and exports were partly offset by an upward revision to private inventory investment, resulting in a general picture of economic growth that remains the same.

The downwardly revised GDP growth in the third quarter compares to the 4.2 percent spike in the second quarter, with the slowdown reflecting the downturn in exports and decelerations in non-residential fixed investment and consumer spending.

The report also showed a rebound in imports, which are a subtraction in the calculation of GDP, although the movements were partly offset by an upturn in private inventory investment.

Looking ahead, Andrew Hunter, Senior U.S. Economist at Capital Economics, said, "As things stand, growth looks to have slowed in the fourth quarter, albeit to a still-healthy pace of about 2.8%."

On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy prices, showed price growth slowed to 1.6 percent in the third quarter from 2.1 percent in the second quarter.