U.S. third-quarter GDP revised higher to 3.2% on firmer spending

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.

Another key official gauge of activity – known as gross domestic income – rose at a 0.8% rate. When averaged with GDP, a measure watched closely by those who determine the timing of recessions, it climbed a firmer 2%.