Third-quarter gross domestic product (GDP) was revised higher Thursday following a substantially stronger projection for U.S. economic performance released Wednesday by the Federal Reserve. GDP growth was marked up to an annualized rate of 3.1 percent in the third quarter from a previous estimate of 2.8 percent, driven by strong consumer spending and exports, the Commerce Department reported Thursday. U.S. weekly unemployment benefits claims decreased last week, the Labor Department reported Thursday, reflecting continued strength in hiring conditions within a broader slowdown over the past two years.  Claims fell by 22,000 last week compared to the week prior, hitting 220,000 overall. Continuing claims fell by 5,000 to 1.87 million. “Downside risks to the labor market do appear to have diminished,” Fed Chair Jerome Powell said Wednesday, after lowering interest rates by a quarter percent. “But the labor market is now looser than pre-pandemic, and it’s clearly still cooling further, so far in a gradual and orderly way.” The numbers come in the wake of across-the-board upward projections from the Fed regarding topline U.S. economic performance. For 2024, GDP expectations were raised up to 2.5 percent from 2.0 percent, inflation was lifted to 2.4 percent from 2.3 percent, and unemployment was lowered to 4.2 percent from 4.4 percent.  Similar upwards adjustments were made for 2025 as well, most notably for inflation in the personal consumption expenditures (PCE) price index, which was raised to 2.5 percent from 2.1 percent. “The economy grew faster in the second half of 2024 so far than we had expected and is expected to be above our expectations in September next year as well,” Powell said. Unexpected strength in topline metrics likely means fewer interest rate cuts next year than markets were anticipating. The Fed is now expecting just two quarter-point cuts next year instead of the four predicted in September to hit a terminal rate of 3.9 percent in 2025. The Dow Jones Industrial Average of big U.S. companies fell by more than 1,000 points on Wednesday’s news as investors adjusted to expectations of stronger underlying performance and relatively tighter monetary conditions. “Aside from the decision itself, just about every other aspect leant in a more hawkish direction than expected,” market analysts for Deutsche Bank noted in a Thursday commentary. “Our US economists see yesterday’s meeting as reinforcing their baseline view that a skip at the January meeting will likely turn into an extended pause in 2025.” Profits for financial companies increased $3 billion in the third quarter, marking an upward revision of $5.6 billion from the previous estimate, while those of nonfinancial companies were revised downward by $5.9 billion, the Commerce Department reported.