The U.S. economy grew at a 5.0% annual pace in the third quarter, matching the best performance since the third quarter of 2003. The increase in real gross domestic product was revised up from 3.9%, mainly because of consumer spending and business investment, the Commerce Department said Tuesday. Economists polled by MarketWatch had predicted GDP would be revised up to a seasonally adjusted 4.4%. Consumer spending, the main source of economic activity, was revised up to 3.2% from 2.2%. Spending on business fixed investment was revised up to 8.9% from 7.1%, while spending on equipment was raised to 11.0% from 10.7%. The rise in exports was also raised to % from 4.9%. The gain in business inventories was revised to $82.2 billion from $79.1 billion, a high level that could induce companies to scale back a little in the fourth quarter and perhaps impinge on growth. Inflation as measured by the PCE index was unchanged at a 1.5% annual rate.
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