Economic Growth Is Slowest in Four Years
The U.S. economy grew at just a 2.4 percent annual rate in the July-September period, the slowest pace in four years, according to revised figures released yesterday by the Commerce Department.</br></br>An unusual decline in federal government purchases of goods and services and smaller gains in business spending on new equipment and inventories were the primary reasons for the substantial drop from the second quarter's 5.6 percent growth rate.</br></br>Commerce last month initially estimated third-quarter growth at a 2.7 percent rate, but more complete data recently available caused the downward revision.</br></br>As they had when the original figures were released, however, a number of analysts said the nation's economic situation remains solid with growth likely to pick up again to between a 3 percent and 4 percent rate in the final three months of the year and continue in that range for some time.</br></br>"The headline was a lot weaker than underlying demand," said Bruce Steinberg, chief economist for Merrill Lynch & Co. in New York. "Private domestic demand grew at a 4.4 percent rate in the third quarter, far from indicating any serious problems in the broad economy. We expect growth to rise north of 3 percent in the fourth quarter and in 2001."