US economic growth rebounds in Q3 on trade, but demand is slowing

US economic growth rebounded more than expected in the third quarter amid a continued decline in the trade deficit, but that overstates the economy's health as the Federal Reserve's aggressive interest rate increases curbed consumer spending.

Gross domestic product increased at a 2.6 per cent annualised rate last quarter, the Commerce Department said in its advance GDP estimate on Thursday, ending two straight quarterly decreases in output, which had raised concerns that the economy was in recession.

The economy contracted at a 0.6 per cent pace in the second quarter.

Economists polled by Reuters had forecast GDP growth rebounding at a 2.4 per