U.S. economic growth in the third quarter was revised slightly higher, reflecting somewhat stronger personal spending than previously estimated.

Inflation-adjusted gross domestic product increased at a 2.1 per cent annualized rate during the period, compared with an initially reported 2 per cent, Commerce Department data showed Wednesday. Consumer spending, which accounts for the majority of the economy, grew 1.7 per cent.

Inventories added more than 2.1 percentage points to overall growth in the quarter. The median GDP estimate in a Bloomberg survey of economists had forecast a minor upward revision to 2.2 per cent.

The report underscores how a combination of a surge in COVID-19 infections, supply shortages and labor constraints induced a sharp slowdown last quarter in personal consumption. Recent data, including stronger-than-expected October retail sales, suggest a re-acceleration of spending in the final three months of the year.

Headwinds remain, however. Rising prices and a collapse in consumer sentiment threaten to constrain household spending, and any worsening of the persistent transportation bottlenecks and supply chain challenges seen in recent months could further stifle growth.

The report also included the first read on business earnings for the period. Pretax corporate profits increased an annualized 4.3 per cent from the prior quarter and were up nearly 21 per cent from a year earlier. Amid rising labor and materials costs, companies have had great success in raising prices.