Newspaper article THE JOURNAL RECORD

U.S. Economy `Picked Up Steam' during the Summer / but, Is Still below Reagan Predictions

Newspaper article THE JOURNAL RECORD

U.S. Economy `Picked Up Steam' during the Summer / but, Is Still below Reagan Predictions

Article excerpt

WASHINGTON - The economy, after six months of disappointing growth, picked up steam during the summer, but the pace still remained bel ow the rebound predicted by the Reagan administration, the government reported Thursday.

The Commerce Department said the gross national product, the broadest measure of economic health, grew at a 3.3 percent annual rate from July through September.

This represented a three-fold increase over the anemic 1.1 percent growth rate turned in during the first six months of the year.

It also represented an upward revision from an initial ""flash'' estimate made last month, which put third quarter growth at 2.8 percent.

However, the administration was predicting growth in the second half of the year would post a five-fold increase. On the basis of this optimism, the administration forecast growth for the entire year of 3 percent.

But most private economists are predicting growth will average only around 2 percent this year, a sluggish rate that would qualify as a ""growth recession,'' a period when economic activity picks up so slowly that unemployment rises.

Commerce Secretary Malcolm Baldrige, briefing reporters on the GNP report, conceded that it ""would be difficult'' to achieve the kind of growth that would be needed to hit the administration's target for the year.

But he predicted that the fourth quarter would turn in growth of over 3 percent and said the final three months of the year would be ""at least as good'' as the July-September quarter.

At the White House, spokesman Larry Speakes maintained, ""The economy is clearly performing well. With inventories now at a very low level and consumer demand very strong, we expect a sharp increase in production and continued acceleration of growth in the GNP.''

While the economy strengthened in the July-September quarter, many private economists are worried that growth will slacken again in the final three months.

They base their concern on the belief that little has been done to solve the country's biggest problem, a flood of foreign imports robbing American manufacturers of sales.

The weakness in manufacturing has dampened overall growth as both income and employment have shown little improvement this year.

Adding to the pessimism, the government also announced today that new housing construction fell 9.3 percent in September, the biggest drop since May.

The Commerce Department said that new housing was built at an annual rate of 1.58 million units in September as single-family home construction dropped 10.4 percent and apartment construction fell 7. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.