Just as the nation’s 3.9% growth rate in the spring exaggerated the strength of the economy, the slowdown to 1.5% in the third quarter likely understates how well the U.S. is doing.
The economy grew more slowly from July through September almost entirely because companies drew down inventories by the largest amount in three years. Had firms merely kept inventories at the same level, the economy would have grown 2.9%, driven once again by another strong increase in consumer spending.
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