U.S. economic growth was far stronger than initially thought in the third quarter, pointing to strengthening fundamentals that should support the economy for the rest of the year.



The Commerce Department on Tuesday raised its estimate of gross domestic product to a 3.9 percent annual pace from the 3.5 percent rate reported last month, reflecting upward revisions to business and consumer spending.

Growth had increased at a 4.6 percent rate in the second quarter. The economy has now experienced the two strongest back-to-back quarters of growth since 2003.

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Economists polled by Reuters had expected growth would be cut to a 3.3 percent pace.

Inventories were also revised higher, with restocking now only accounting for a mild drag to GDP growth. That also helped to offset downward revisions to export growth.