Economic activity in the U.S. increased by more than previously estimated in the third quarter, according to a report released by the Commerce Department on Tuesday.

The report said real gross domestic product climbed by 2.1 percent in the third quarter compared to the previously reported 1.5 percent increase. The upward revision matched economist estimates.

The Commerce Department said the stronger than previously estimated growth primarily reflected an upward revision to private inventory investment.

However, the upward revision to GDP growth was partly offset by downward revisions to consumer spending and exports.

The stronger than previously estimated GDP growth still reflects a slowdown compared to the 3.9 percent jump seen in the second quarter.

Chris Low, chief economist at FTN Financial, said, "From the Fed's perspective, the revision doesn't mean much. It's strong enough to allow a rate hike, but not strong enough to demand one."

The Commerce Department said the increase in GDP in the third quarter primarily reflected positive contributions consumer spending, non-residential fixed investment, state and local government spending, residential fixed investment, and exports.

The upside was limited by a negative contribution from private inventory investment and an increase in imports, which are a subtraction in the calculation of GDP.

Sterling vs US Dollar (FX:GBPUSD)
Forex Chart
From Feb 2024 to Mar 2024 Click Here for more Sterling vs US Dollar Charts.
Sterling vs US Dollar (FX:GBPUSD)
Forex Chart
From Mar 2023 to Mar 2024 Click Here for more Sterling vs US Dollar Charts.