WASHINGTON — The U.S. economy grew more than previously calculated in the third quarter, led by stronger consumer spending and fueled by labor income gains that may stoke demand into 2011.
The revised 2.5 percent increase in gross domestic product compares with a 2 percent estimate issued last month and a 1.7 percent rise in the second quarter, figures from the Commerce Department showed Tuesday. Consumer purchases rose 2.8 percent, the fastest pace since the last three months of 2006.
Employee wages in the six months through September were revised upward by about $59 billion, indicating Americans may ramp up their spending heading into the holiday shopping season. Along with gains in corporate investment in new equipment, the figures show an evolving expansion led more by demand and less by inventory restocking.
“You have a little firmer final sales — that is the very encouraging part of the report,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “It makes me a little more comfortable with the sustainability of the recovery.”
Separate figures from the National Association of Realtors showed the economy is not without its headwinds. Sales of previously owned homes fell more than forecast in October as foreclosure moratoriums and a lack of credit disrupted the U.S. housing market.
Purchases decreased 2.2 percent to a 4.43 million annual rate from 4.53 million in September. Economists projected sales would decline to a 4.48 million pace, according to the median forecast in a Bloomberg News survey.
Tuesday’s third-quarter growth figures showed bigger gains in exports, consumer spending and business investment in new equipment than previously estimated.
Business spending on new equipment and software advanced at a 16.8 percent pace last quarter, compared with an initial estimate of 12 percent.
Corporate profits rose 2.8 percent after a 3 percent increase in the second quarter. Earnings were up 28 percent from the same time last year.
“Households are getting a little bigger share of the pie,” Feroli said. “For a more balanced recovery, it’s good to see households are getting a little more.”
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