NEW YORK The U.S. economy is on track to grow at a 2.2 percent annualized rate in the third quarter, the Atlanta Federal Reserve's GDP Now forecast model showed on Friday following data that showed a surprise drop in construction spending in August.
The latest third-quarter GDP estimate was lower than the 2.4 percent figure calculated on Friday, the Atlanta Fed said on its website.
The government said earlier Monday construction spending fell 0.7 percent in August to a seasonally adjusted annual rate of $1.142 trillion, the lowest since December 2015. Economists polled by Reuters had forecast outlays to rise 0.2 percent.
In the wake of the latest construction spending data, Atlanta Fed's forecast on third-quarter real nonresidential structures investment growth fell from 8.4 percent to 4.7 percent and its forecast of third-quarter real government spending growth declined from 0.8 percent to 0.1 percent.
The Atlanta Fed has steady lowered its outlook on U.S. gross domestic product in the third quarter following a string of disappointing readings in areas including trade.
The regional central bank's latest GDP forecast for the third quarter was markedly lower than its initial call of 3.6 percent on Aug. 3.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)