US growth revised down for third quarter

WASHINGTON: The United States economy grew at a slower pace than previously estimated in the three months to the end of September, the British Broadcasting Corporation reported on Wednesday.Revised figures from the US Commerce Department showed gross domestic product grew at an annual pace of two per cent in the period, down from the previous estimate of 2.5 per cent.Despite the downward revision, the quarters growth was still up from the April-June periods 1.3 per cent figure.The revision was largely due a prior over-estimate of restocking by firms.Japans earthquake seriously disrupted the global supply chain earlier in the year. High energy prices had also weighed heavily on consumer spending.However, continued restocking and lower fuel prices recently, had led economists to speculate that US fourth-quarter growth could rise to an annualised rate of more than three per cent, which would be the fastest in 18 months.An Economist at IFR Economics, Vimombi Nshom, said, "Although growth was downsized, its still the strongest showing of 2011, with GDPs largest component - consumer spending - holding on to its developments from Q2."Consumer spending growth was revised slightly down to 2.3 per cent from 2.4 per cent but it was still the quickest pace since the fourth quarter of 2010.The Commerce Department said that after-tax corporate profits increased at a three per cent rate after rising 4.3 per cent in the second quarter.Export growth was stronger than previously estimated, rising at a 4.3 per cent rate instead of four per cent. Imports increased at a much slower 0.5 per cent rate rather than 1.9 per cent.The report showed that real disposable income fell by 2.1 per cent in the third quarter after declining by 0.5 per cent in the prior three months.There were also small revisions to business investment, which rose at a 14.8 per cent rate instead of 16.3 per cent.Despite the latest GDP data being broadly welcomed by many analysts, fund manager at Fiduciary Trust, Michael Mullaney, said: "This is somewhat disappointing. "The positives are that personal consumption is still OK, but Im concerned because that seems to be coming at the expense of personal savings."Were in the camp that theres at least a 50 per cent chance of a double dip so it doesnt surprise us that the number is softer."
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