US economic growth revised up to 2.1% in the third quarter

US economic growth for the third quarter has been revised up, helped by stronger investment and house building.

The Commerce Department said gross domestic product rose at an annual pace of 2.1%, not the 1.5% rate it reported last month.

Consumer spending was revised down slightly, although this was offset by growth in other economic areas.

Even with the GDP revision, growth still slowed from an annual pace of 3.9% in the second quarter.

However, in the second quarter of the year the economy was rebounding from the impact of the harsh winter weather experienced at the start of the year, which slowed the US economy to a crawl.

The better third quarter growth is still likely to fuel speculation that the US Federal Reserve is ready to raise interest rates next month.

'Solid' demand

The upward revision by the Commerce Department puts the US economy on course to grow at least 2% in the second half. It comes in the wake of strong jobs growth in October.

"Domestic demand in the US economy remains very solid, something that will surely give comfort to the Fed as it ponders its next move," said Robert Kavcic, a senior economist at BMO Capital Markets.

The main factor behind the upward revision to the growth figure was the discovery that businesses had restocked their inventories at a faster pace than first estimated.

Consumer spending, which accounts for more than two-thirds of US economic activity, grew at a 3% rate, down from the 3.2% rate estimated last month.

Growth in business investment slowed to a rate of 3.4% from 5.2% in the previous quarter. That was mainly due to a sharp drop in spending on oil and gas exploration by energy firms because of the weak oil price.