U.S. Economic Growth Surges; Output Rises at Highest Rate Since 1984, but Jobs Still Decline
PUBLISHED CORRECTIONS: In an Oct. 31 article on economic growth, a quotation about the number of payroll jobs lost from June to September was incorrectly attributed to Rep. Fortney "Pete" Stark (D-Calif.). The number cited was also incorrect: The correct figure is 41,000. (Published 11/01/ 03)</br></br>The U.S. economy, firing on all cylinders, grew this summer at the fastest pace in nearly two decades, even as it was losing jobs.</br></br>The Commerce Department reported yesterday that the economy expanded at a roaring 7.2 percent annual rate in the July-to- September period as a result of large gains in consumer spending, business investment, housing construction and exports. It was the highest growth rate since the first quarter of 1984.</br></br>Defense spending was flat in the third quarter, despite continuing military operations in Iraq. This spring, defense spending skyrocketed and contributed substantially to the second quarter's 3.3 percent economic growth rate. Late last year and early this year, the economy grew at a weak 1.4 percent annual rate.</br></br>Fueled by personal-income-tax cuts that became effective in July and a record surge in home-mortgage refinancing that gave homeowners more cash to spend, consumer purchases rose at a very strong 6.6 percent annual rate in the third quarter, by far the strongest factor in the overall gain in the nation's economic output, or gross domestic product. Businesses also got new tax incentives to invest.