WASHINGTON – The economy grew at an annual rate of 3.7 percent in the summer as a big rebound in auto sales offset weakness from an exploding trade deficit, soaring oil prices and the Florida hurricanes, the government reported Friday.
The July-to-September increase in the gross domestic product – the country’s total output of goods and services – was up a bit from the 3.3 percent GDP growth rate in the spring, but was well below the 4.3 percent rate many economists had been forecasting.
The weaker than expected third-quarter result raised new worries over the threats posed to the economy by rising energy prices, lackluster job growth and overextended consumers.
“This is less than a stellar number,” said Mark Zandi, chief economist at Economy.com. “The economy is not growing fast enough to create significant new jobs and bring the unemployment rate down.”
After racing ahead at a 4.5 percent rate in the first three months of the year, GDP growth slowed to a 3.3 percent rate in the second quarter.
The slowdown, which Federal Reserve Chairman Alan Greenspan termed a “soft patch,” reflected a sharp retrenchment by consumers, who pulled back on their purchases in the face of rising energy bills.
For the third quarter, consumer spending climbed to a 4.6 percent rate of increase, the best growth in a year, up from an anemic 1.6 percent rate in the second quarter.
The rebound was led by a 16.8 percent surge in purchases of big-ticket goods as consumers, lured by new dealer incentives, went on an auto buying spree.
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