Inventories provided a boost to GDP growth rather than being a drag as first estimated. Stockpiles contributed 0.77 percentage points to growth, compared with a prior estimate that showed they subtracted 0.12 percentage point. At the same time, larger inventories mean businesses may limit production in the fourth quarter unless demand accelerates.
Fed Chairman Ben S. Bernanke has said an agreement on reducing long-term federal budget deficits without abrupt tax increases and spending cuts would remove a barrier to growth.
“A plan for resolving the nation’s longer-term budgetary issues without harming the recovery could help make the new year a very good one for the American economy,” Bernanke said in a Nov. 20 speech.