New claims for unemployment hit a 3 year low last week, suggesting that the economy is beginning to gain momentum despite third quarter growth being revised down. Initial claims for unemployment benefits dropped 4,000 to a seasonally adjusted 364,000 last week. Last week’s drop in unemployment benefits claims is the third straight weekly drop and is the lowest since April 2008.

“The employment situation continues to show strong signs of a recovery and goes against the grain of what people felt four months ago,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York.

The jobs data helped shift the focus away from a separate report from the Commerce Department showing GDP grew by 1.8% in the third quarter. GDP was previously reported to have grown by 2%, but saw healthcare spending drop sharply in the third quarter.

Despite being revised lower, the GDP for the third quarter was up from the 1.3% growth seen in the second quarter.

Consumer spending was revised to 1.7% from 2.3% because of adjustments to healthcare services, especially those in nonprofit hospitals. Durable goods saw an upward revision to 5.7% from 5.5%. Business inventories dropped less than expected with a $2 billion drop versus an estimated $8.5 billion. If you take out inventories, the economy grew by an adjusted 3.2%, down from 3.6%.

Overall the market is reacting positively to the jobs data and opened up slightly higher this morning. As of 9:50 am EST, the Dow is up 40 points, the Nasdaq is up 17 points and the S&P is up 6 points. Expect volume to be light today as the holiday weekend approaches.