Make us your home page

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

  1. Tampa International named among least expensive airports


    TAMPA — Florida airports apparently have a knack for getting it done cheaply.

    According to RewardExpert, Tampa International Airport is the fifth least expensive domestic airport. 
[CHARLIE KAIJO   |   Times
 file photo]

  2. Tampa-based vXchnge secures $200M loan to expand operations


    TAMPA — Tampa-based vXchnge, which operates data centers in 14 metro areas, has secured a loan for roughly $200 million for "major expansions and enhancements."

    Tampa-based vXchnge, a data center provider, secured a $200 million loan. Pictured is CEO Keith Olsen. | [Courtesy of vXchnge]
  3. No toll lanes north of downtown Tampa in three of four interstate proposals


    TAMPA — Express lanes may not be coming to downtown Tampa after all. Or at least not to the stretch of Interstate 275 that goes north through Bearss Avenue.

    Seminole Heights resident Kimberly Overman discusses the new interstate options with V.M. Ybor resident Chris Vela (left), Hillsborough County Commissioner Pat Kemp and HNTB consultant Chloe Coney during a Tampa Bay Express meeting Monday night at the Barrymore Hotel. [CAITLIN JOHNSTON  |  Times]
  4. Pinellas commission set to discuss next budget, licensing board

    Local Government

    CLEARWATER –– The Pinellas County Commission will be busy on Tuesday.

  5. Pinellas grants St. Pete's request to add millions to pier budget

    Local Government

    Times Staff Writer

    The Pinellas County Commission has granted St. Petersburg Mayor Rick Kriseman's request to dedicate millions more toward the city's new pier.

    The St. Petersburg City Council on Thursday  voted 7-1 to appropriate $17.6 million for the over-water portion of the Pier District. This is a rendering of what the new Pier District could look like. [Courtesy of St. Petersburg]