WASHINGTON: US economic growth for the fourth quarter is likely to be revised higher after data on Wednesday showed a more robust pace of consumer spending than previously estimated.
The Commerce Department's quarterly services survey, or QSS, showed consumption, including healthcare spending, increased at a faster clip than the government had assumed in its second estimate of gross domestic product published last month.
Economists said the data suggested fourth-quarter consumer spending could be raised by at least six-tenths of a percentage point to a 4.9 percent annual rate when the government publishes its third GDP estimate later this month.
"That would be the strongest quarter for consumption since 2003. A stronger trend for consumption could carry over into the first quarter, but we want to see the monthly details before changing our views on first-quarter growth very much," said Daniel Silver, an economist at JPMorgan in New York.
But the QSS also indicated that estimates for the intellectual property products component of business investment could be lowered. The government reported last month that investment in intellectual property products expanded in the fourth quarter at the fastest pace since the first quarter of 2000.
All told, the QSS suggested fourth-quarter GDP growth could be raised to a 2.5 percent pace from the 2.2 percent rate reported last month, Silver said.
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