Third-Quarter GDP Revised Downward to 2.8% from 3.5%

The U.S. economy expanded at a lower rate than previously reported in the third quarter, growing at a 2.8% annual rate versus the 3.5% reported last month, the Commerce Department said Tuesday.

The gross domestic product gain was the first in a year and the revised increase matched economists’ forecasts, Bloomberg reported.

The GDP fell 0.7% in the second quarter and the economy had contracted 3.8% in the 12 months through June, the worst such performance in 70 years, Bloomberg reported.

Consumer spending, which accounts for about 70% of the economy, rose at a 2.9% rate, following a 0.9% downturn in the second quarter.

A big part of the increase was pegged to the government’s “cash for clunkers” automobile-purchase incentive program.

Third-quarter corporate profits, also reported Tuesday, rose 11%, the biggest gain since the first quarter of 2004.

Tuesday’s GDP report was the second of three; a final report for the third quarter will be released next month.