The U.S. economy grew at a slower pace than originally
forecast according to the U.S. Department of Commerce,
because of slower inventory growth from business.
The Commerce Department revised down GDP growth from
the July to September quarter to 2 percentage points
annualized, which is down from the 2.5 percent
originally estimate.
The revision is mainly due to smaller inventories at
businesses, which could mean a ramp-up in spending in
the fourth quarter amid stronger consumer demand. But
in the same report, the Commerce Department said that
inflation-adjusted-after tax incomes dropped by the
quickest rate in two years, as the high unemployment
rate and slower income growth hit home for many
consumers. After-tax corporate income, however, rose
3 percent.
Despite the depressed income, most economists are still
predicting a 3 percent growth in GDP for the fourth
quarter mainly based on encouraging October retail sales
reports recently released as well as high factory output.
However, any gains should be fleeting unless there is a
stable job market and higher pay raises. In October,
the economy added 80,000 more jobs.
The U.S. government typically makes more revisions to the
quarterly GDP numbers as data becomes more available and
more complete.
Sheila McKinney
