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 per cent in the July-September quarter, less than half the 3.9 per cent 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 per cent 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.

bbabo.Net