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U.S. economy on track to grow 1.3 percent in third quarter: Atlanta Fed

A crane flies an American flag over a construction site in downtown Los Angeles, California October 29, 2014. REUTERS/Mike Blake

NEW YORK (Reuters) - The U.S. economy is on track to grow at an annualized rate of 1.3 percent in the third quarter following news of a stronger-than-expected 0.6 percent rise in industrial output in July, the Atlanta Federal Reserve's GDPNow forecast model showed on Tuesday.

This was stronger than the regional Fed bank's prior estimate on Aug. 13 of a 0.7 percent rise in gross domestic product, the Atlanta Fed said on its website.

The model upgraded third-quarter GDP growth as the factory production report included a 15.3 percent increase in motor vehicle assemblies in July, reducing the drag from an expected inventory decline in the quarter to 1.8 percentage points from 2.2 points, the Atlanta Fed said.

(Reporting by Richard Leong Editing by W Simon)