The US economy grew at the fastest pace in four years over the last quarter, boosted by growing exports and business inventory building, the Commerce Department said today. The economy grew at a 4.9 pct annual pace in the three month period, a full percentage point higher than the 3.9 pct gain originally estimated and the fastest pace since the third quarter of 2003. In the second quarter, the economy grew at a 3.8 pct annual pace. Overall inflation, measured by the personal consumption expenditures index, was unrevised at 1.7 pct. Core PCE inflation, excluding food and energy prices, was also unrevised at 1.8 pct, remaining within the Federal Reserve's informal "comfort zone." Export growth was 18.9 pct in the new estimate, up from 16.2 pct, including a 25.8 pct increase in goods exports as the dollar's decline made US products more attractive to businesses and consumers abroad. Import growth was revised lower than the earlier estimate, rising 4.3 pct instead of the 5.2 pct. That was still sharply higher than the 2.7 pct decline in imports in the second quarter. That reflected in part a downward revision to consumer spending, which accounts for more than two thirds of the economy. Government economists cut their estimate of personal consumption expenditures to a 2.7 pct rise from their first estimate of a 3.0 pct gain. Consumers were cutting back in Q3 after a slowdown in their income growth in Q2. New numbers show a 24.5 bln usd increase in the Spring quarter, down from an original 44.8 bln usd estimate. Total final sales in the US economy were also higher in the latest Q3 GDP report, rising 3.9 pct instead of the 3.5 pct growth estimated a month ago. An increase in inventory building by businesses also contributed to faster growth. The revised number for Q3 was 27.1 bln usd, nearly three times the 9.9 bln usd first estimated. Economists had been forecasting the higher growth rate based on expected upward revisions to net exports and inventories. Combined net exports and inventory building were a plus 2.35 points in the Q3 GDP calculation by the Commerce Department, substantially exceeding the 1.88 points contributed by US consumer spending. The economic drag from the housing recession was a bit less than first estimated, though still substantially larger than the drag in the second quarter. Real residential fixed investment fell 19.7 pct in the latest estimate, a slightly smaller decline that the 20.1 pct drop. In the second quarter, housing investment fell 11.8 pct. In its first report on Q3 corporate profits, the Commerce Department said they fell 1.2 pct or 19.3 bln usd, after a 6.1 pct, 94.7 bln usd increase in Q2. The government economists warned, however, that the huge financial corporation write-offs related to subprime mortgages show up quite differently in corporate accounting than they do in the official economic statistics.