Reports Suggest Slowdown In Growth

The economy appears to be cooling and may not need higher interest rates to keep it from overheating and igniting a fresh round of inflation, new government reports suggest.

Data released Thursday showed residential construction and industrial production both slowed in September, while business inventories and the number of new claims for jobless benefits grew faster than expected.

The Commerce Department reported that housing starts tumbled 6 percent in September, to a seasonally adjusted 1.44 million annual rate. That’s the lowest since a 1.43 million rate last December.

The decline was the steepest since a 9 percent plunge in January 1995. Analysts had forecast a smaller 2 percent decline.

In another report, the Federal Reserve said industrial production grew 0.2 percent in September, just half the 0.4 percent pace of a month earlier.

The Commerce Department reported separately that business inventories grew 0.5 percent in August for a second straight month as sales fell 0.3 percent. Analysts had expected a 0.3 percent growth in stockpiles.

In another report suggesting slower growth, the Labor Department said new applications for unemployment insurance jumped by 18,000 last week to 340,000.

It was the highest since a 341,000 total during the week ended Sept. 28. Analysts had expected an increase of just 11,000.