(RTTNews) - While the Commerce Department’s preliminary report on third quarter gross domestic product released on Tuesday continued to show growth in the economy following four consecutive quarters of contraction, the pace of growth was downwardly revised from the advance estimate.

The report showed that GDP increased by an annual rate of 2.8 percent in the third quarter compared to the 3.5 percent growth that had been reported last month. Economists had been expecting the pace of GDP growth to be revised down to about 2.9 percent.

Despite the downward revision, the GDP growth seen in the third quarter still markets a notable turnaround from the 0.7 percent decrease reported for the second quarter.

The Commerce Department said that the downward revision to the pace of growth primarily reflected an upward revision to imports as well as downward revisions to consumer spending and non-residential fixed investment.

Imports, which are a subtraction in the calculation of GDP, increased by an upwardly revised 20.8 percent compared to the previously reported 16.4 percent growth. The growth follows a 14.7 percent drop in the second quarter.

Additionally, the pace of consumer spending growth in the third quarter was downwardly revised to 2.9 percent from 3.4 percent, although it still represents a rebound from the 0.9 percent decrease seen in the previous quarter.

At the same time, the Commerce Department noted that the negative revisions were partly offset by an upward revision to exports, which rose by 17.0 percent in the third quarter following a 4.1 percent decrease in the second quarter.

Commenting on the data, Peter Boockvar, equity strategist for Miller Tabak, said, “Bottom line, while somewhat old news in that we’re 2/3 done with Q4, it sets the stage at which Q4 began and that was slightly below estimates on a nominal basis and with consumer spending.”

On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy prices, rose 1.3 percent in the third quarter compared to the previously reported 1.4 percent growth and the 2.0 percent increase in the second quarter.

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Posted in Categories: Economy, Forex, Releases, USA.

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