Richard Tafoya
Oct 27th, 2006, 09:04 PM
LA Times:
http://www.latimes.com/business/la-102706econ,0,7046478.story?coll=la-home-headlines
The U.S. economy, dragged down by the slumping housing market, slowed in the three summer months to its weakest growth rate since the beginning of 2003, when it was emerging from the doldrums following the 2001 recession, the government reported today.
Inflation moderated, even when falling energy prices were disregarded, but remained higher than the "comfort zone" of the Federal Reserve, the nation's central bank and No. 1 inflation fighter.
The final reading on economic growth before the hotly contested Nov. 7 congressional elections immediately drew political reaction from both sides. Republicans said the report showed that the economy had been growing steadily for five years under President Bush. But the Democrats protested that the wealthiest Americans have largely enjoyed prosperity, while the middle and working classes have been barely treading water.
Many analysts said that relatively weak growth in the summer represented the storm before the calm. Almost all had forecast an upswing in the final three months of the year, although they were split on whether the Federal Reserve would raise interest rates to inhibit inflation or lower them to encourage more growth.
The Commerce Department's report showed the gross domestic product, the total value of everything the U.S. economy produced, rising at an annual rate of 1.6% during the July through September period. That compared with 2.6% growth during the previous three months and 5.6% during the first three months of the year.
The most recent growth rate fell short of the consensus of private economists, which was about 2%.
As gasoline prices have retreated, Americans have become less worried about the economy. A Gallup poll this month found that 19% of respondents listed the economy as the nation's top problem, down nearly half from the 35% just two months earlier.
http://www.latimes.com/business/la-102706econ,0,7046478.story?coll=la-home-headlines
The U.S. economy, dragged down by the slumping housing market, slowed in the three summer months to its weakest growth rate since the beginning of 2003, when it was emerging from the doldrums following the 2001 recession, the government reported today.
Inflation moderated, even when falling energy prices were disregarded, but remained higher than the "comfort zone" of the Federal Reserve, the nation's central bank and No. 1 inflation fighter.
The final reading on economic growth before the hotly contested Nov. 7 congressional elections immediately drew political reaction from both sides. Republicans said the report showed that the economy had been growing steadily for five years under President Bush. But the Democrats protested that the wealthiest Americans have largely enjoyed prosperity, while the middle and working classes have been barely treading water.
Many analysts said that relatively weak growth in the summer represented the storm before the calm. Almost all had forecast an upswing in the final three months of the year, although they were split on whether the Federal Reserve would raise interest rates to inhibit inflation or lower them to encourage more growth.
The Commerce Department's report showed the gross domestic product, the total value of everything the U.S. economy produced, rising at an annual rate of 1.6% during the July through September period. That compared with 2.6% growth during the previous three months and 5.6% during the first three months of the year.
The most recent growth rate fell short of the consensus of private economists, which was about 2%.
As gasoline prices have retreated, Americans have become less worried about the economy. A Gallup poll this month found that 19% of respondents listed the economy as the nation's top problem, down nearly half from the 35% just two months earlier.