WASHINGTON – The nation’s economy demonstrated just how sturdy it is, posting its strongest quarterly showing in more than a year despite the Gulf Coast hurricanes.
Gross domestic product, the best measure of economic standing, increased at a hearty 4.3 percent annual rate from July through September, the Commerce Department reported Wednesday.
The reading was even better than the 3.8 percent pace estimated a month ago for the third quarter, and exceeded analysts’ projections of a 4 percent pace. GDP measures the value of all goods and services produced in the United States.
The upgraded performance reflected brisk spending by consumers and businesses despite record energy prices, and stronger investment in home building.
“The economy shrugged off the ill effects of the hurricanes very gracefully,” said Mark Zandi, chief economist at Moody’s Economy.com.
The hurricanes did bite into economic activity, especially when it came to jobs. Zandi and other economists believe economic growth probably would have topped 5 percent if the hurricanes had bypassed the United States.
Nonetheless, the GDP’s growth during the third quarter was the strongest since the first three months of 2004. Also, it showed the economy gained considerable momentum from the 3.3 percent pace in this year’s second quarter, the April-June period.
On Wall Street, the Dow Jones industrials lost 82.29 points as investors fretted that the robust GDP growth might prompt the Fed to order more rate increases in the future than had been anticipated.
Separately, a Federal Reserve report suggested the economy had solid momentum in October and much of November.
Manufacturing, retail sales and hiring improved in many regions, the Fed said. Housing activity, while still healthy, slowed in many markets; demand for home mortgages eased in some areas.
The Fed’s observations added to other signs of a gradual cooling in the housing market.
Looking ahead, economists predict the economy will turn in a solid performance in the October-to-December quarter, even based on the assumption of consumers’ belt-tightening.
Economic growth projections for the fourth quarter range from a growth rate of 3 percent to 4 percent. A few analysts believe the GDP could come in around 2 percent, lower than predicted by most others.
Associated Press
Employees of clothing retailer H&M dress mannequins in holiday fashions in a New York store window display on Wednesday.
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