U.S. Economy Roars Ahead; Inflation Low; Third-Quarter Growth Revised Upward to 5.5%
The U.S. economy grew at a hefty 5.5 percent annual rate in the July-September period, a remarkably rapid pace for an economic expansion only a few months shy of its ninth birthday, the Commerce Department reported yesterday.</br></br>"The U.S. economy remains in overdrive," said Bruce Steinberg, chief economist at Merrill Lynch & Co. in New York. "We expect the fourth-quarter gross domestic product to rise at about a 5 percent rate [and then] to moderate slightly to a 3.5 percent to 4 percent rate during 2000."</br></br>Last month, Commerce had estimated third-quarter economic growth at a somewhat slower but still strong 4.8 percent annual rate. It revised that estimate upward yesterday on the basis of more complete information about economic developments during the period.</br></br>Even with such rapid growth and an unemployment rate just above 4 percent, inflation remained extremely low during the summer.</br></br>Prices paid by consumers, businesses and governments for their purchases--regardless of whether the goods and services were produced in the United States or imported--rose at a 1.7 percent rate in the third quarter. Excluding the volatile prices of food and energy items, the increase was at only a 1.2 percent rate.