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· GDP
growth slowed down from 6.7% to 2.1%
· Pretax
corporate profit increased to nearly 21% from a year earlier
U.S. economic growth for the October–December quarter was
revised marginally higher, indicating slightly stronger personal spending than
previously estimated.
Inflation-adjusted gross domestic product (GDP) rose at a
2.1% annualized rate during the third quarter, Commerce Department data showed
Wednesday.
The increase was revised up 0.1 percentage points from the
“advance” estimate, which was initially reported as an increase of 2% in
October, the government said in its second estimate of GDP growth for the
period.
Economists had expected the pace of GDP growth to be revised
to 2.2%.
GDP growth slowdown
Even with the slightly stronger growth than the previously
estimated increase, the third quarter data still suggests a substantial
slowdown from the 6.7% spike in the second quarter.
The commerce department said the slowdown in consumer
spending led to the deceleration in real GDP in the third quarter.
Moreover, a combination of a surge in COVID-19 cases and new
restrictions, supply shortages and labor constraints prompted a sharp slowdown in
personal consumption last quarter.
In the third quarter, the U.S. govt’s financial assistance
program in the form of forgivable loans to businesses, grants to state and
local governments, and social benefits to households also decreased.
Revised marginal growth
However, the slight upward revision indicates a more modest
pace of inventory drawdown than what was initially estimated, which offset a
big step-down in consumer spending.
The report also included business earnings for the period. Despite
rising labour and materials costs, pretax corporate profits increased an
annualized 4.3% from the July-September quarter.
The pretax corporate profit shot up nearly 21% from a year
earlier.
Picture Credit: CNBC