US gross domestic product was revised up to a 2.9% annualized rate from 2.5%, led by an upgrade to consumer spending.

The final quarter of 2017 marked the third quarter in a row with GDP close to or exceeding 3%, the pace the Trump administration set as a target for the economy.

Several forecasters have downgraded their GDP estimates for the first quarter of 2018, though Q1 growth tends to be the slowest of the year.

The US economy grew faster than previously estimated in the final quarter of 2017, a report from the Commerce Department showed on Wednesday.

Gross domestic product, the value of every thing produced and every service rendered in the US, was revised to a 2.9% annualized rate in the third estimate, up from 2.5% in the second.

With more complete data, the report showed that consumer spending during the holiday-shopping season was stronger than initially reported. Most of the upward revision was driven by spending on transportation. Late last year, data from Mastercard SpendingPulse also showed that retailers recorded the strongest holiday sales growth since 2011.

Consumption, the largest contributor to economic growth, rose at a 4% rate, revised up from 3.8% in the prior two estimates. Core personal consumption expenditures, the Federal Reserve's preferred gauge of inflation, increased at a 1.9% pace, just shy of the Fed's 2% target.

The data also showed that business inventories were less of a drag on the economy than had been estimated.

The final quarter of 2017 marked the third quarter in a row with GDP close to or exceeding 3%, the pace the Trump administration set as a target for the economy. Though the full impact of tax cuts and higher government spending remains to be seen, many economists have said the 3% target on a sustainable basis is too high. That is partly because productivity growth has slowed over the years.

Focus is now on the current quarter, as several forecasters have downgraded their estimates through the months. For example, the Atlanta Fed's GDPNow tracker plunged from a 5.4% estimate in January to 1.8% as of Wednesday.

Economists are also watching for the impact of so-called residual seasonality — a glitch in how the Bureau of Economic Analysis adjusts for unique trends in the first quarter such as holiday spending — that tends to undercut growth in early estimates.