The U.S. economy grew at a slightly slower pace in the third quarter than initially estimated, as consumer spending was revised downward, the Commerce Department reported on Wednesday.
Gross domestic product (GDP) increased at a 2.1% annualized rate in the July-September period, down from a 2.3% pace reported last month, according to the second estimate of GDP.
Economists polled by Reuters had expected the third-quarter GDP growth rate to be unrevised at 2.3%.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 1.7% rate in the third quarter, a deceleration from the 1.8% pace reported last month.
The economy is showing resilience despite the Federal Reserve’s aggressive interest rate hikes aimed at curbing inflation.
Inflation continued to cool in the third quarter, with the personal consumption expenditures (PCE) price index rising at a 2.4% rate, down from 2.5% in the second quarter.
Core PCE, a measure of inflation that excludes volatile food and energy prices, increased at a 2.3% rate, down from 2.4% in the prior quarter.
The Fed’s preferred inflation gauge, the PCE price index, has been a key focus for policymakers as they assess the path of monetary policy.
The labor market remains strong, with unemployment at historically low levels, which has supported consumer spending.
However, businesses are showing signs of caution, with investment in equipment and structures softening.
The U.S. central bank has raised interest rates by 525 basis points since March 2022 in its most aggressive tightening cycle in four decades.
The Fed is expected to keep interest rates steady at its next meeting, but the outlook for future rate cuts remains uncertain.
The government will release its final estimate of third-quarter GDP on December 21.
