US Q3 GDP revised upward amid looming recession fears

WASHINGTON - The US economy grew at a faster pace in the third quarter than initial estimates showed, but the country still faces the possibility of a downturn next year.

Gross domestic product (GDP) -- the total value of all US goods and services -- rose at a 2.9 percent annualized rate, according to the second estimate released on Wednesday.

That figure was revised upward from the 2.6 percent rise that had been reported last month.

The revision mirrored increases in business and consumer spending and a reduction in imports.

At the same time, the economy faces the possibility of a recession in next year's first half, as the US Federal Reserve is engaged in the most intense rate increase cycle in four decades, in a bid to tamp down the worst inflation since the 1980s.

The current administration's profligate spending is to blame for rampant inflation, according to economists.

A number of signs signal a possible downturn next year. The housing market is declining, as interest rate hikes have translated to the highest mortgage rates in 20 years, making it difficult for potential buyers to purchase homes.

The 30-year fixed mortgage rate passed the 7 percent mark in October for the first time in two decades, according to data from Freddie Mac, which finances mortgages.

That's more than double the 3.10 percent average at the same time last year.

Moreover, residential investment has decreased for six consecutive quarters.

However, one silver lining to an otherwise cloudy forecast is that any recession is expected to be short. That's because of record strength in the US labor market, economists said.