(RTTNews) - Revised data released by the Commerce Department on Tuesday showed the U.S. economy rebounded by slightly more than previously estimated in the third quarter of 2020.
The report showed the spike in gross domestic product in the third quarter was upwardly revised to 33.4 percent from the previously reported 33.1 percent. Economists had expected the jump in GDP to be unrevised.
The Commerce Department said the unexpected upward revision primarily reflected larger increases in consumer spending and non-residential fixed investment.
The substantial increase in GDP in the third quarter came following a record contraction in the second quarter, when GDP plunged by 31.4 percent.
A measure of an industry's contribution to GDP showed private goods-producing industries increased 47.2 percent, private services-producing industries increased 35.1 percent, and government increased 10.1 percent.
"The leading contributors to gains were manufacturing, healthcare, accommodation and food services, retail trade, and wholesale trade," said Gregory Daco, Chief U.S. Economist at Oxford Economics.
However, he added, "The recovery remains far from complete, with output sill below pre-Covid levels across several industry groups."
On the inflation front, the report said core consumer prices, which exclude food and energy prices, were up 1.4 percent year-over-year in the third quarter, reflecting an acceleration from the 1.0 percent increase in the second quarter.
The annual rate of core consumer price growth remains well below the Federal Reserve's 2.0 percent target, which the central bank has said it wants to moderately exceed for some time before considering raising interest rates.
"As we gaze into 2021, the outlook will be one of contrasts," Daco said. "The economy will start the year gingerly, and it'll be prone to hiccups during the delicate vaccine diffusion phase."
"But, as the cocktail of increased government transfers and broad-based vaccinations takes shape, we should expect gradually firming activity leading to a mini-summer boom," he added. "We anticipate real GDP growth around 4.5% on average in 2021 after a 3.4% contraction in 2020."
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