The economy in the U.S. grew less than previously estimated in the third quarter, reflecting a smaller gain in consumer spending that is giving way to a pickup in demand this quarter as the job market improves.

Gross domestic product climbed at a 1.8 percent annual rate from July through September, down from the 2 percent estimated last month, revised Commerce Department figures showed today in Washington. The median forecast of 82 economists surveyed by Bloomberg News projected it would hold at 2 percent. Household purchases increased at a 1.7 percent rate, down from 2.3 percent.

The world's largest economy has picked up this quarter as manufacturers rebuild depleted inventories, Americans take advantage of holiday discounts and pent up demand boosted sales of new cars. Nonetheless, the threat of government cutbacks and fallout from financial turmoil in Europe remain obstacles for expansion heading into 2012.