U.S. economic growth 3.1 percent in summer

The U.S. economy grew at a 3.1 percent

The U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported, reflecting the first gain in state and local government spending in three years, more consumer purchases and a smaller trade gap. President Barack Obama watches work on an engine during a tour of the Daimler Detroit Diesel Plant in Redford, Mich. (Dec. 10, 2012) (Credit: Getty Images)

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The U.S. economy grew at an annual rate of 3.1 percent over the summer as exports increased, consumers spent more and state and local governments added to growth for the first time in three years. But the economy is likely slowing in the current quarter.

The Commerce Department's third and final estimate Thursday of growth for the July-September quarter was revised up from its previous estimate of a 2.7 percent annual growth rate.

Growth in the third quarter was more than twice the 1.3 percent growth rate in the April-June quarter. But disruptions from superstorm Sandy and uncertainty weighing on consumers and businesses from the "fiscal cliff" are likely holding back growth in the October-December quarter.

Many analysts predict an annual growth rate of just 1.5 percent for this quarter.

Robert Kavcic, an economist at BMO Capital Markets, said the upward revision to third-quarter growth didn't change his view that the economy is slowing in the current quarter to an annual growth rate below 2 percent. And many economists aren't expecting much improvement in the January-March quarter.-- AP

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