U.S. GDP revised down to 2.8 pct

By Lucia Mutikani

WASHINGTON (Reuters) - The U.S. economy grew more slowly than first thought in the third quarter, but a fifth month of gains in house prices in September and an improvement in consumer morale signalled the anaemic recovery was intact.

In its second estimate of third quarter gross domestic product published on Tuesday, the Commerce Department said the economy expanded at a 2.8 percent annual rate, rather than the 3.5 percent pace it estimated last month.

It was still the fastest pace since the third quarter of 2007, reflecting government fiscal stimulus, but slightly less than expectations for a growth rate of 2.9 percent.

That helped to push stocks on Wall Street .N lower as investors shrugged off two other reports showing that house prices maintained their gains in September and consumers were a bit more optimistic this month, despite high unemployment.

"We are still on the right path and a double-dip (recession) is not on the cards," said Jonathan Basile, an economist at Credit Suisse in New York.

With federal programs the main force behind the recovery, some economists are wary of risks of a double-dip recession -- a scenario where output perks up briefly only to fall again when government support ends.

Economists expect the U.S. unemployment rate to climb from its current 26-1/2 year high of 10.2 percent. President Barack Obama is under to pressure to find ways to spur job growth without unduly fuelling an already record budget deficit.

The return to growth in the July-September period, after four straight quarters of declining output, probably ended the most painful U.S. recession in 70 years. The economy contracted at a 0.7 percent rate in the April-June period.