US Q3 growth slumps to 1.6%
The US economy crawled to its slowest growth rate since early 2003 .
By Agencies |
WASHINGTON: The US economy crawled to its slowest growth rate since early 2003 in the third quarter as the housing market slumped, the government said on Friday.
In a first estimate for the three months through September, the Commerce Department said US gross domestic product (GDP) grew at an annual rate of just 1.6 per cent.
That was much worse than the growth pace of 2.1 per cent expected on Wall Street, and compared to second-quarter growth of 2.6 per cent and a blistering 5.6 per cent recorded in the first quarter.
Heading into pivotal elections on November 7, analysts said the news would add ammunition to the Democrats' campaign to retake control of Congress from President George W. Bush's Republicans.
"The headline news remains that growth slowed to 1.6 per cent and the average American voter could care less that the deceleration was skewed towards residential investment spending and the trade deficit," Moody's Investors Service economist John Lonski said.
But Republican leaders noted that the Dow Jones share average stands at record highs of more than 12,000 points.
"Everybody expected this (GDP slowdown)," White House spokesman Tony Snow told reporters.
"You have the combination of rising energy prices and also rising interest rates, and now you've seen a reversal on both," he said, insisting that growth would "continue to rebound".
Over July to September, the world's biggest economy posted its worst performance since the first quarter of 2003, due above all to the end of a long boom in the US property market.
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