(Bloomberg, USA) — U.S. Economic Growth in the Third Quarter was slightly revised higher than expected. This is due to a greater personal spending.

Commerce Department data Wednesday revealed that the inflation-adjusted gross national product rose at an annualized pace during this period, up from 2% initially reported. Consumption, the largest sector of the economy, increased 1.7%.

In the fourth quarter, inventories contributed more than 21% to total growth. In a Bloomberg survey, economists predicted a modest upward revision of 2.2% to the median GDP.

This report highlights how the combination of Covid-19 infection surges, shortages in supply and labor restrictions caused a drastic slowdown in personal consumption last quarter. Recent data, including stronger-than-expected October retail sales, suggest a re-acceleration of spending in the final three months of the year.

There are however still some headwinds. A collapse of consumer sentiment and rising prices could limit household spending. Any worsening or escalating transportation bottlenecks, supply chain problems and persistent transport bottlenecks seen over the past months may further hinder growth.

This report included the first look at business earnings during the reporting period. Pretax corporate profits increased 4.3% on an annual basis and were almost 21% more than one year prior. High prices have been achieved despite increasing labor and material costs.

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