WASHINGTON (AP) – The U.S. economy slowed sharply in the summer, reflecting a cutback in businesses’ stockpiling of goods, which offset strength in consumer spending.
The Commerce Department said Thursday that the economy, as measured by the gross domestic product, grew at a tepid annual rate of 1.5 percent in the July-September quarter, less than half the 3.9 percent growth rate for the previous quarter.
The major reason for the slowdown was a push by businesses to reduce unwanted stockpiles, which slashed 1.4 percentage points from last quarter’s growth. Consumer spending remained solid, rising at a 3.2 percent rate, down only slightly from the previous quarter.
Analysts generally say the summer slowdown will be temporary. Most forecast that businesses will resume building inventories this quarter in response to further gains in consumer spending.
Last quarter’s slump marked the latest turn for an economy that began 2015 on a rocky note as a severe winter and West Coast port disruptions essentially stalled growth. The economy rebounded in the April-June quarter before weakening again in the summer.