The U.S. economy was still growing at a weak 1.4 percent annual rate from July through September, the government said Wednesday, but most economists believe it since has slipped into a recession.
The Commerce Department reported its final estimate of the third-quarter gross national product was even slower than the 1.7 percent gain in its initial estimates in October and November.In another report, the department said housing starts jumped 9.3 percent in November, their first increase in 10 months. But the gain was due entirely to a rebound in multi-family starts as single-family building fell to a level unmatched since the 1981-82 recession.
Bush administration officials, while avoiding the use of the word "recession," agree the economy is weakening. Earlier this week, Treasury Secretary Nicholas F. Brady admitted the economy is experiencing a "significant slowdown" that is likely to persist through early 1991.
Surveys of private economists and professional forecasters show that most believe the economy actually is contracting and will continue to deteriorate into next year.
They contend the economy was stumbling along the rim of a recession before the Aug. 2 Iraqi invasion of Kuwait and that the subsequent oil-price shock shoved it over the edge.
A recession generally is defined as two consecutive declines in the GNP, the nation's total output of goods and services and its broadest measure of economic health.
It grew at an anemic 1.7 percent annual rate during the first quarter, but slowed to a barely perceptible 0.4 percent rate in the second.
The department also reported that a GNP measure of inflation rose at an annual rate of 4.2 percent. It had been revised to 4.2 percent last month after the department initially said it had risen 4.1 percent.
In its housing report, the department said starts of new homes and apartments totaled a seasonally adjusted 1.13 million units following a 6.6 percent drop in October. It was the first increase since a 23.2 percent gain last January.
Contributing most to the downward revision in the GNP was a slower gain in consumer spending and a wider trade deficit than first estimated.
Consumer spending rose just 2.7 percent rather than the 3.2 percent reported last month. The trade deficit was $1.9 billion, compared with a $500 million gap in last month's estimate.