Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, December 2, 1993 TAG: 9312020019
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The seasonally adjusted gain in the nation's gross domestic product, the sum of all goods and services produced in the United States, represented a slight revision to an earlier estimate of 2.8 percent, the Commerce Department said Wednesday.
The change was attributed to a surge in imports, up at a 6.1 percent annual rate instead of the 1.9 percent first reported.
Analysts nevertheless were cheered by the economy's overall performance, particularly since it occurred despite billions of dollars in crop damage from floods in the Midwest and drought in the Southeast. Without the crop losses, the GDP would have risen 3.3 percent.
Many analysts are forecasting growth of better than 4 percent during the current quarter. They warn that the economy probably will slip early next year but said the swing won't be as severe as a year ago, when the economy raced ahead at a 5.7 percent rate in the fourth quarter only to lapse to an anemic 0.8 percent pace in the first.
"The economy right now is growing at a pretty hefty clip. It did well in the summer and it's doing better in this quarter . . . but this rate of growth probably is not sustainable," said economist Bruce Steinberg of Merrill Lynch.
Other data out Wednesday - on trade, construction and corporate profits from the Commerce Department and on manufacturing from a private group - portrayed a thriving economy, with the exception of trade.
Construction spending rose 2.5 percent in October, the sixth consecutive advance and the longest string in seven years.
Corporate profits in the third quarter rose 0.8 percent from the second quarter, when they increased 5.2 percent. For the year so far, profits are running 7.8 percent higher than last year.
The manufacturing sector expanded in November for the second consecutive month, according to a monthly index compiled by the National Association of Purchasing Management.
The economy's strongest sectors in the third quarter were stimulated by low interest rates: housing construction, which grew at a 10.9 percent rate, and business investment in equipment such as computers and machinery, up at a 10 percent rate.
Consumer spending advanced briskly as well, at a 4.4 percent rate. It was particularly robust, 7.3 percent, for durable goods - big-ticket items expected to last three or more years.
Soft spots included government spending, particularly for the military, and construction of commercial buildings, both up at a tiny 0.3 percent rate.
by CNB