The US economy grew slightly less vigorously during the third quarter than previously thought, slowed by the sharpest slump in housing activity in more than 15 years, the Commerce Department said today.
Gross domestic product or GDP, the broadest measure of overall economic activity within US borders, expanded at a revised 2 per cent annual rate in the July-September period instead of 2.2 per cent estimated a month ago.
That was a slowdown from the second quarter's 2.6 per cent rate of GDP increase.
The revised third-quarter figure is based on updated information and is the government's final measure of GDP growth in the period. Wall Street economists had forecast it would be unchanged from last month's reading but the department said consumer spending on services was weaker than it previously thought.
Reaction in financial markets was muted since the report was roughly in line with expectations.
The rate of increase in so-called core prices, which exclude food and energy items, slowed to 2.2 per cent in the third quarter from 2.7 per cent in the second quarter.
Analysts said the slower quarterly rise in prices was reassuring.
But on a year-over-year basis, third-quarter core prices rose 2.4 per cent - the strongest since a matching 2.4 per cent in the second quarter of 1995 - after gaining 2.2 per cent year-over-year in the second quarter.
Federal Reserve policy-makers, who have kept interest rates steady since mid-year, say they continue to remain vigilant against any possibility inflation does not recede.
Separately, the Labor Department said 9,000 more workers applied for first-time jobless benefits last week - a total 315,000 and roughly the number that analysts had forecast.
Spending on new-home building plunged 18.7 per cent, steeper than the 18 per cent drop estimated a month ago. It was the biggest drop since a 21.7 per cent fall in the first quarter of 1991 and was the fourth consecutive quarter in which building activity declined.