GDP Growth Revised Upward For 3rd Quarter --- Slight Change in the Rate Is Largely Considered Insignificant by Analysts
WASHINGTON -- Economic growth was slightly stronger during the third quarter than previously estimated, the Commerce Department reported.</br></br>But the upward revision of 0.1 percentage point in gross domestic product -- to a 4.0% annual rate -- was largely brushed aside by economists, who said it was too insignificant to prompt a rethinking of their predictions for growth.</br></br>Many are forecasting continued strong growth through the beginning of next year, followed by a slowing in the economy as the effects of higher interest rates start to kick in.</br></br>Additional evidence of recent economic momentum came from a separate Commerce Department report yesterday on the growth in third-quarter corporate profits: Although the figure was revised downward 0.3 percentage point to show a 2.5% increase, the updated figure was still strong enough to suggest healthy business activity.</br></br>The slight upward revision in GDP, which measures all goods and services produced in the U.S., primarily reflected more spending by foreign travelers in this country. "That's an encouraging sign. We need the export growth to keep the train rolling," said David Orr, chief economist for First Union Corp. in Charlotte, N.C.