A report from the Commerce Department showed on Tuesday that the U.S. economy grew slightly more than initially thought in the third quarter of 2020, as gains in personal consumption expenditures (PCE) and nonresidential fixed investment were revised upwardly.

According to the third estimate, the U.S. gross domestic product (GDP) surged at an annual rate of 33.4 percent in the third quarter, better than a 33.1 percent advance reported in the second estimate. This represented the biggest expansion ever.

Economists had expected the contraction rate to be unrevised at 33.1 percent.

In the second quarter, the economy shrank by record 31.4 percent q-o-q.

The increase in real GDP reflected gains in PCE, private inventory investment, exports, nonresidential fixed investment, and residential fixed investment, which, however, were partly offset by declines in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Meanwhile, imports, which are a subtraction in the calculation of GDP, rose.