Instant view: Third-quarter GDP revised lower

NEW YORK (Reuters) - The U.S. economy grew at a slightly slower pace than previously estimated in the third quarter, but weak inventory accumulation amid sturdy consumer spending strengthened views output would pick up in the current quarter.

KEY POINTS: * Gross domestic product grew at a 2.0 percent annual rate in the third quarter, the Commerce Department said in its second estimate on Tuesday, down from the previously estimated 2.5 percent. * While the revision was below economists' expectations for a 2.5 percent growth pace, the composition of the GDP report, especially still-firm consumer spending and the first drop in businesses inventories since the fourth quarter of 2009 set the platform for a stronger economic performance this quarter. * Data so far suggest the fourth-quarter growth pace could exceed 3 percent, which would be the fastest in 18 months.

COMMENTS:

VIMOMBI NSHOM, ECONOMIST WITH IFR ECONOMICS, A UNIT OF THOMSON

REUTERS:

"Notable revisions to private investments made Q3 GDP growth slip from an earlier estimate of 2.5%, to suggest that the amount of goods and services produced in the US grew at an annualized rate of 2% in the third quarter. Although growth was downsized, it's still the strongest showing of 2011, with GDP's largest component -- consumer spending -- holding on to its developments from Q2.

"In fact, spending barely received any of revisions cuts, now estimated to have grown 2.3% when it had been 2.4%. The brunt of revisions' damages were felt in gross private investments, which after having been reported as having risen 4.1% in Q3 and adding 0.52 percentage points (pp) to GDP, are now shown as having subtracted 0.10 pp from GDP, as a result of Q3 investments falling by 0.9%.

"As better-than-expected trade figures had already implied, net exports helped GDP (mostly due to lesser imports). Fixed investment's impressive first estimate of having grown 13.7% was humbled to one of 12.3% because of smaller growth in both nonresidential and residential. The change in private inventories took away a larger 1.55pp from GDP compared to the last report's subtraction of 1.08pp."

MARKET REACTION:

STOCKS: U.S. stock index futures added to losses

BONDS: U.S. bond prices weakened slightly

FOREX: The dollar was slightly stronger