U.S. Q3 GDP revised up to 2.7% from 2.0% (by Jeffry Bartash)

WASHINGTON (MarketWatch) - The U.S. economy expanded at 2.7% pace in the third quarter, mostly because of higher inventories and exports, the Commerce Department said Thursday. The government originally put third-quarter gross domestic product at 2.0%. The second of two regularly scheduled updates to quarterly GDP includes fresh data not available in the first report. Yet the increase in consumer spending last quarter was cut sharply to a rate of 1.4% from 2% originally, while final sales were trimmed to a 1.9% increase from 2.1%. Inventories rose by $61.3 billion in the third quarter compared to $41.4 billion in the second quarter. Exports were revised up to a 1.1% increase from a 1.6% decline and imports were revised to 0.1% rise from a 0.2% drop. Business capital investment fell a sharper 2.2% instead of 1.3% as originally reported. Investment in equipment and software was revised to a 2.7% decline from a first estimate of no change. The increase in disposal personal income was revised down for the quarter to 0.5% from 0.8%. Inflation as measured by the PCE index rose 1.6%, or by a tame 1.1% excluding food and energy.