U.S. economy was hotter than previously thought, new GDP data shows

By the numbers: The revision is a slight upgrade from the 4.9% annualized growth initially estimated. The data will be revised again in December.

• The Q3 figure shows the economy recorded the fastest growth in nearly two years. In the prior quarter, GDP increased 2.1%.

Between the lines: The update to the Q3 data reflects stronger spending on the part of corporations for structures, equipment and intellectual property.

• It also shows upgrades to state and local government spending. Imports, which act as a drag on the GDP figure, were also revised lower.
• That was offset by a downward revision to consumer spending — which still increased at a rapid 3.6% annualized rate.

The intrigue: The release also includes the first estimate of an alternate measure of economic growth: gross domestic income (GDI), which sums up all income across the economy.

• By that measure, growth increased rapidly compared to the second quarter. In Q3, GDI increased 1.5%, a full percentage point above the prior quarter's reading.

The bottom line: Economic growth is expected to slow from Q3's torrid pace. Still, the data shows that the U.S. economy remained solid.