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BY JIM FLINK

Hard to know what to make of the latest economic numbers. The government downgraded its assessment of third quarter GDP -- or Gross Domestic Product. But corporate profits are on the rise.

The Financial Times reports...

“The US economy grew more slowly than originally thought in the third quarter as businesses drew down their inventories faster than expected.  Gross domestic product growth was revised down to an annual rate of 2 per cent in the third quarter from an earlier estimate of 2.5 per cent, according to the commerce department.”

That inventories number is key. Usually a drawdown in inventory is a precursor to more bad economic news, according to an analyst on CNBC.

“You cannot sustain a level of inventories, given where the level of consumer spending is and business spending has been.  So what you’re gonna do is take that inventory drag in the third quarter, turn that into an inventory increase or surge in the fourth quarter.”

Which, at least theoretically, could turn into a fourth quarter bounce. Combined with stronger third quarter business profits -- both could signal an upward tick. The L.A. Times reports....

“Even as the economy continued to limp along, corporate profits increased in the quarter. Domestic profits of financial corporations increased $16 billion in the third quarter, in contrast to a decrease of $54.2 billion in the second.”

Still, the takeaway for most is that, while the economy continues to grow, and chances of a double-dip are remote, the pace of growth is anemic at best. The Wall Street Journal surveyed several analysts and got a mixed bag of reaction.

The Wharton School’s Justin Wolfers says the numbers are much worse than the headlines suggest.

“The more reliable GDI [gross domestic income] rose only 0.4% in the third quarter after 0.2% in the second… Worse: second-quarter estimate of GDI revised down from 1.3% to 0.2%… In case you are feeling optimistic, remember: The optimistic GDP data tend to be revised toward the pessimistic GDI data. Not the reverse.”

But TD Securities’ Eric Green sounds a more optimistic tone.

“GDP in fourth quarter is still set to be 3.0% or higher, and in some ways the downward revisions providers a marginally better set-up for fourth quarter given the mix of revisions.”

All of this, against the backdrop of uncertainty, both in Europe and Stateside. Bloomberg talks with an analyst who says, until that uncertainty is solved, this economy is in flux.

“How can individuals plan their lives when they have no idea what the level of taxes are going to be or the structure of taxes.  And the same thing for businesses.  So it makes it very difficult to hire, it makes it very difficult to have a robust recovery.”

While analysts argue about the GDP’s impact, the newest job numbers are due out in a week and a half.