U.S. economy exceeds forecasts

U.S. economic growth in the third quarter was firmer than previously estimated, reflecting upward revisions to consumer spending and business investment.

Inflation-adjusted gross domestic product, or the total value of all goods and services produced in the economy, increased at a 3.2% annualized rate during the period, Commerce Department data showed Thursday.

That compares with a previously reported 2.9% advance.

Personal consumption was revised significantly higher, advancing 2.3% in the latest report compared to 1.7% in an earlier estimate and reflecting stronger services spending.

The figures highlight how despite rising interest rates and rapid inflation, consumer and business demand remains solid.

A strong labor market and wage growth has underpinned household spending, but it’s unclear whether Americans will be able to maintain that spending momentum into 2023.

Meanwhile, a key inflation gauge – the personal consumption expenditures price index excluding food and energy – rose an annualized 4.7% in the third quarter, up slightly from the previous estimate.

November monthly data will be released Friday.

Little change in U.S. jobless claims Applications for U.S. unemployment benefits were little changed last week, remaining near a historically low level, underscoring businesses’ reluctance to lay off workers in a supply-constrained labor market.

Initial unemployment claims increased by 2,000 to 216,000 in the week ended Saturday, Labor Department data showed Thursday. The median forecast was for 222,000 applications.

Continuing claims, or the number of people who have already filed an initial application and are now claiming unemployment benefits, edged down to 1.67 million in the week ended Dec. 10.

It marked the first decline since the period ended Oct. 1.

The measure has been slowly climbing, a potential indication that it’s been more difficult for out-of-work individuals to find new jobs.

The four-week moving average in initial claims, which smooths out some of the week-to-week volatility, slipped to a one-month low of 221,750.

From wire reportsThe data can be particularly difficult to seasonally adjust around the holidays.

The job market remains extremely tight, and while there have been some signs of cooling, the ongoing imbalance between supply and demand for labor continues to put upward pressure on wages.

It’s also made many employers more reluctant to reduce headcount, given the challenges in attracting and retaining employees.

Separate data from the Conference Board on Wednesday showed more consumers viewed jobs as “plentiful” in December than in the prior month, while fewer people perceived jobs as “hard to get.”