Growth lower than expected

Associated Press

WASHINGTON

The U.S. economy grew at a slightly slower pace over the summer than the government previously had estimated. Most

economists foresee a slight acceleration in the current quarter and stronger growth in the first half of 2016.

The Commerce Department said Tuesday that the economy, as measured by the gross domestic product, expanded at a 2 percent annual rate in the July-September quarter. That was a bit lower than its previous estimate of 2.1 percent, a result of less restocking by businesses than previously estimated.

Last quarter’s expansion was significantly below the 3.9 percent annual GDP growth in the second quarter. The slowdown reflected a cutback in the pace of inventory restocking. Economists think growth in the final quarter will amount to about a 2.2 percent rate, helped by solid consumer spending.

The government’s latest estimate showed that slower growth in business stockpiles shaved a 0.7 percentage point from third-quarter growth, larger than the 0.6 percentage point reduction earlier estimated. The government revises its GDP estimates as new data comes in.

The 3.9 percent annual growth in the April-June quarter followed a barely discernible 0.6 percent increase in the January-March quarter. Growth in the first quarter was depressed by an unusually severe winter and disruptions at West Coast ports.

Economists’ expectation is that the economy is growing at a moderate annual rate of about 2.2 percent in the current quarter and will accelerate to a 2.3 percent rate or higher in the first half of next year.

Gus Faucher, senior economist at PNC, said he expects economic growth of 2.4 percent for all of 2016.

“Consumer spending will continue to lead overall growth,” Faucher said.