Third-Quarter GDP Growth Was 4.3%, Government Says

Growth in the U.S. economy last quarter was stronger than previously believed, the government said Wednesday, pushed up by still-blistering demand from consumers and less inventory liquidation.

The Commerce Department said in its second formal estimate that gross domestic product rose 4.3% from July through September, up from its "advance" reading of 3.8%. Economists were generally expecting a growth rate of 4% in Thursday's "preliminary" update.

GDP grew by 3.3% in the second quarter and 3.8% in the first quarter.

Wednesday's report is laden with inflation gauges, some of which are closely watched by the Federal Reserve. The third-quarter gain in the price index for personal consumption was revised lower, to 3.6% from 3.7%, in the advance GDP report. Excluding food and energy, it rose 1.2%, down from 1.3% in the last report.

The chain-weighted price index rose at a 3% rate in the Wednesday update. It had previously been estimated at 3.1%. Meanwhile, the price index for gross domestic purchases held steady at a 4% growth rate.

The two main factors in Wednesday's upward revision were a higher estimate of real final sales, which came in at a 4.7% annual rate, up from 4.4% in the first estimate, and a weaker drag from inventory liquidations. Businesses sold down inventories by $13.4 billion in the quarter, down from the advance estimate of $16.6 billion.