Make us your home page
Instagram

U.S. economy grew at 1.5 percent rate in third quarter

Major components of the economy such as consumer demand have held up well in recent months. [Associated Press]


Major components of the economy such as consumer demand have held up well in recent months. [Associated Press] 

Despite still-healthy spending by consumers, U.S. economic growth slowed significantly in the third quarter, the government said Thursday.

At an annualized rate of 1.5 percent, the growth tempo in July, August and September shows a marked drop from the 3.9 percent pace in the second quarter.

Wall Street had expected the Commerce Department data to show a slowdown in the third quarter, with economists looking for a growth rate of 1.6 percent before the report.

Thursday's report is the first of three estimates the government will make and the numbers could be revised upward or downward as more data come in.

Much of the downshift was because of slower inventory accumulation, as businesses let stockpiles of goods in warehouses and on store shelves unwind a bit rather than making big additions as they had done in the first half of 2015.

Although the lackluster headline number will not stir much excitement, major components of the economy such as consumer demand have held up well in recent months. Consumption rose 3.2 percent last quarter.

Residential investment also remained healthy last quarter, a sign that the housing market continued to provide the overall economy with a much-needed tailwind.

"Personal consumption is the 800-pound gorilla of the economy," said Scott Clemons, chief investment strategist at Brown Brothers Harriman. "It's quite good, especially given that the recovery is a bit long in the tooth."

Indeed, the pluses and minuses buried in the details of Thursday's report highlight the contradictions that economists, Federal Reserve policymakers and ordinary consumers all have to contend with after more than six years of tepid economic growth.

Some sectors — technology, health care, finance — are enjoying conditions that echo the booming 1990s or the housing bubble of a decade ago.

Things could not be more different in areas of the economy that depend on commodity prices, like the oil and gas industry, which is cutting jobs amid a downturn in energy prices. Manufacturers, too, have felt headwinds as the strong dollar and weakness in China have hurt sales overseas.

Echoing this pattern, economic conditions are best on the coasts, especially the Northeast as well as Silicon Valley, while broad swaths of the country's midsection are struggling.

U.S. economy grew at 1.5 percent rate in third quarter 10/29/15 [Last modified: Thursday, October 29, 2015 7:07pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, New York Times.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. The real estate pros in charge of Tampa's $3 billion makeover are younger than you think

    Working Life

    TAMPA — Brooke May, a 36-year-old senior construction project manager, knew she wanted to work for Strategic Property Partners the minute she met some team members involved with the group's massive downtown Tampa makeover.

    Matt Davis, Vice President of Development posed for a portrait in the Strategic Property Partners office in Channelside on July 12, 2017, in Tampa, Fla. [MONICA HERNDON   |   Times]
  2. St. Pete Beach may loosen beach drinking rules for hotel guests

    Local Government

    ST. PETE BEACH — Drinking a beer, a cocktail or a glass of wine may soon be legal on this city's beaches, but only for hotel guests in and around their hotel's beachfront cabanas.

    Registered hotel guests would be able to drink alcoholic beverages at their cabanas on the beach under a new rule the St. Pete Beach City Commission is considering.  

  3. PunditFact: George Will's comparison of tax preparers, firefighters based on outdated data

    Business

    The statement

    "America has more people employed as tax preparers (1.2 million) than as police and firefighters."

    George Will, July 12 in a column

    The ruling

    WASHINGTON - JANUARY 08: Conservative newspaper columnist George Will poses on the red carpet upon arrival at a salute to FOX News Channel's Brit Hume on January 8, 2009 in Washington, DC. Hume was honored for his 35 years in journalism. (Photo by Brendan Hoffman/Getty Images)
  4. Appointments at Shutts & Bowen and Tech Data highlight this week's Tampa Bay business Movers & Shakers

    Business

    Legal

    Retired U.S. Navy Commander Scott G. Johnson has joined Shutts & Bowen LLP in its Tampa office as a senior attorney in the firm's Government Contracts and Corporate Law Practice Groups. Johnson brings 15 years of legal experience and 24 years of naval service to his position. At Shutts, Scott will …

    United States Navy Commander (Retired) Scott G. Johnson joins Shutts & Bowen LLP in its Tampa office. [Company handout]
  5. Macy's chairman replaces ex-HSN head Grossman on National Retail Federation board

    Retail

    Terry Lundgren, chairman of Macy's Inc., will replace Weight Watchers CEO Mindy Grossman as chair of the National Retail Federation, the organization announced Wednesday. Grossman stepped down from her position following her move from leading St. Petersburg-based HSN to Weight Watchers.

    Weight Watchers CEO and former HSN chief Mindy Grossman is being replaced as chair of the National Retail Federation. [HSN Inc.]