U.S. GDP revised higher, though hiring suffers a minor blow

Dec. 22 (UPI) -- Inflationary strains have yet to deal a major blow to the U.S. economy with data Thursday showing a rebound in third quarter GDP and a slight dip in hiring.

The Commerce Department on Wednesday revised its estimate for third quarter gross domestic product, from an increase of 2.9% to 3.2%, which was attributed in large part to an increase in consumer spending.

We'll have to wait for up-to-date data on consumer spending. Retail sales last month declined 0.6% from the prior month, though Thanksgiving shopping was a record-setter this year.

Disposable income among U.S. consumers, meanwhile, increased by $242.4 billion in the third quarter, an upward revision of $6.6 billion, though personal savings declined $12.9 billion from the previous estimate to settle at $507.7 billion for the third quarter.

While wages aren't keeping pace with inflation, that, along with fears of recession, has done little to bruise consumer confidence. The Conference Board this week found the decline in retail-level gasoline prices was enough to buoy optimism for the U.S. consumer in December, following two straight months of decline.

And despite all the doom and gloom, hiring remains relatively strong. Through the week ending Dec. 17, the Commerce Department raised its estimate for initial claims of unemployment by 2,000 to 216,000, though the four-week moving average declined by 6,250 to 221,750.

The data was not enough to trigger a Santa Claus rally. Most major U.S. stock indices were in the red at the start of trading on Wall Street. The Dow Jones Industrial Average was down about 0.9%, the S&P 500 dropped 1.25% and the tech-heavy Nasdaq Composite was off 1.6% as of 9:30 a.m. EST.

U.S. Federal Reserve Chairman Jerome Powell had warned that job losses may be an unfortunate casualty in the effort to tame consumer-level inflation. A steady increase in the Fed's lending rates could create enough pressure to push the economy into recession, though data remain supportive of future growth prospects.