US Q3 business investment revised sharply higher

America's economy slowed a tad more quickly than expected last quarter but in a potentially positive development, data on businesses' outlays on equipment was revised sharply higher.

According to the Department of Commerce, America's gross domestic product expanded at a quarterly annualised pace of 3.5% over the three months to September, which was unchanged from the prelminary estimate, although a tenth of a percentage point lower than economists had forecast.

However, the underlying details were "favourable", said Ian Shepherdson at Pantheon Macroeconomics, pointing to upwardly revised growth of 3.5% in business fixed investment.

Government statisticians had originally calculated growth of 0.4% which, he added, had "always looked suspiciously soft".

Just the day before, US Federal Reserve vice-president, Richard Clarida, had stressed the importance of continued business investment in driving growth in labour productivity, thus boosting the supply side of the American economy.

Shepherdson also picked-up on that fact, telling clients: "Fed Vice-Chair Clarida expressed concern over Q3 capex yesterday, so these data will be comforting."

Household consumption on the other hand was revised down from an initial estimate of 4.0% growth to 3.6%, while investment in structures was marked-up to show a drop of 1.7% instead of a 7.9% fall.

On the prices front, Commerce revised its estimate of the rate of increase in the price deflator for personal consumption expenditures from 1.6% to 1.5%.