US Economy Grew 5.2% in Third Quarter, More Than First Estimated

The downward revision to household outlays reflected slower growth in services spending. After a previously reported decline, business investment was revised up to a gain on the back of firmer outlays for structures. Housing was also stronger than initially reported.

The government’s other main gauge of economic activity — gross domestic income — rose a more moderate 1.5%. GDI is a measure of the income generated and costs incurred from producing goods and services.

The average of the two growth measures was 3.3%, more than double the average pace of the first half of the year.

Even with the downward revision, consumer spending remained robust, underpinned by a resilient jobs market and a flurry of travel and events. That momentum does appear to be cooling into year-end, though it’s far from crumbling.

While data out Thursday is anticipated to show inflation-adjusted outlays rose just 0.1% last month, the start of the holiday shopping season was mixed. US shoppers spent a record $12.4 billion on Cyber Monday, up 9.6% from a year ago, though Black Friday sales disappointed.

The Federal Reserve’s preferred inflation metric — the personal consumption expenditures price index — was revised down to a 2.8% annual rate in the third quarter. Excluding food and energy, the gauge was also marked lower to 2.3%.

The report also showed that adjusted pretax corporate profits posted the biggest increase in more than a year. The gain was fueled primarily by the non-financial sectors, though profits also picked up at financial firms.

After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, picked up to 14.9%.

Separate data Wednesday showed the US merchandise-trade deficit widened to a three-month high in October.