Slowdown Continued In Third Quarter

Economy

The economy has slowed sharply, growing at a rate of only 2.1 percent in the third quarter, a modest pace that many analysts believe will continue through 1997.

The 2.1 percent GDP growth rate in the July-September quarter, represented a small upward revision from a 2 percent estimate the government made just a month ago. The small newfound strength was concentrated primarily in a bigger buildup of business inventories.

Many economists believe the GDP is growing around the 2 percent level in the fourth quarter and is likely to remain in a 2 percent to 2.5 percent range for all of 1997.

That range would match the target set by the Federal Reserve, which wants moderate growth to prolong an expansion that is already in its sixth year.

The government’s final look at third-quarter GDP showed that inflation has remained well-behaved. A price measure tied to the GDP was rising at an annual rate of just 1.7 percent, the lowest in four years.