WASHINGTON (AP) — The U.S. economy grew at a 3.6 percentannual rate from July through September,
the fastest since early 2012.But nearly half the growth came from a buildup in business stockpiles, atrend
that could reverse in the current quarter and hold back growth.TheCommerce Department’s second estimate of
third-quarter growth releasedThursday was sharply higher than the initial 2.8 percent rate reportedlast
month. And it was well above the 2.5 percent growth rate for theApril-June quarter.Almost the entire
third-quarter revision wasdue to a big jump in stockpiles. Consumer spending, the lifeblood of theeconomy,
was the weakest in nearly four years.When excludinginventories, the economy grew at a 1.9 percent rate in
the thirdquarter, down from 2.1 percent in the spring. That’s in line with thesame subpar rate that the
economy has seen since the Great Recessionended four years ago."There’s no momentum here," said
IanShepherdson, chief economist at Pantheon Macroeconomics. He said overalleconomic growth could come in
below 2 percent in the currentOctober-December quarter.Paul Ashworth, chief U.S. economist atCapital
Economics, agreed that inventories will hold back growth in thecurrent quarter. But he disagreed that the
report suggested the economywas not strengthening. He noted that business sales increased markedly,corporate
profits rose, income grew and Americans saved more. The reportadds "to the evidence that the recovery
is gaining momentum."Businessstockpiles contributed 1.7 percent points to growth, twice thecontribution
reported last month in the first estimate. Companies arelikely to cut back on restocking at the end of the
year, especially ifthey don’t see consumers stepping up spending.In thethird-quarter, consumers increased
their spending at a tepid 1.4 percentannual rate. That was the slowest since the final quarter of 2009, afew
months after the recession officially ended. Consumer spendingtypically drives 70 percent of economic
activity.But the spendingactivity in the third quarter was held back by flat spending onservices. That may
have reflected an unusually mild summer, which cutdemand for air conditioning. One hopeful sign: Consumer
spent on goodsat the fastest rate since early 2012.Other details in the reportwere mixed. Business
investment in equipment was flat in the thirdquarter. Spending on housing construction remained strong,
rising at anannual rate of 13 percent. Government spending edged up at a slight 0.4percent annual rate in
the summer. The biggest spending increase instate and local government spending since 2009 offset another
decline infederal expenditures.A number reports have offered some promise that the fourth quarter could be
stronger than many economists are predicting.InOctober, spending at retail businesses rose solidly, U.S.
exports grewto a record level and employers added 204,000 jobs. November car salesrose 9 percent and are
running at an annual rate of 16.4 million, thebest performance of the year, according to Autodata
Corp.Butearly reports on holiday shopping have been disappointing. The NationalRetail Federation estimates
that sales over the four-day ThanksgivingDay weekend — arguably the most crucial shopping stretch for
retailbusinesses — fell for the first time since the group began keeping trackin 2006.Faster growth could
make the Federal Reserve moreinclined to begin slowing its bond purchases, which have kept long-terminterest
rates low and encouraged more borrowing and spending.Many economists believe the central bank will not
reduce the $85 billion-a-month pace when it meets later this month.Copyright 2013 The Associated Press. All
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