The US economy expanded at an annualized rate of 3.7 percent in the third quarter of 2004, the Commerce Department reported. The figure topped the second quarter's 3.3 percent pace but fell short of Wall Street expectations, which had centered on roughly 4.3 percent growth.
Consumer spending rose 4.6 percent, a sharp recovery from just 1.6 percent the prior quarter, while business investment climbed 11.7 percent despite elevated oil prices. On trade, imports surged 7.7 percent, a drag on growth, while exports rose 5.1 percent.
Core inflation dropped to its lowest level in 42 years. The Federal Reserve's preferred price gauge, the personal consumption expenditure deflator excluding food and energy, increased only 0.7 percent in the quarter, the smallest rise since 1962.
The report landed four days before the presidential election, and both the Bush and Kerry campaigns claimed it supported their case. A separate survey found Midwest business activity accelerated sharply in October, with a purchasing managers' barometer jumping to 68.5, a 54-year high.
Most analysts anticipated a slowdown in the fourth quarter and into 2005, citing higher oil prices and tighter policy. With inflation subdued, the Fed was seen as unlikely to quicken its pace of rate increases; the federal funds rate stood at 1.75 percent.
Historical summary. TurkishPress restated this AFP wire report, first published in October 2004, in its own words.