Government Cuts Estimate Of Growth Rate

The government cut its estimate of economic growth in the final three months of last year, but many economists think that’s actually good news for growth in the first part of this year.

That’s because the substantial downward revision by the Commerce Department on Friday - from a steamy 4.7 percent annual rate to a still-robust 3.9 percent rate - came almost entirely because of a slower buildup in inventories of unsold goods.

And that means any pickup in consumer demand will more quickly translate into production increases at the nation’s factories.

“The implications for present and future growth actually are quite favorable,” said economist Lynn Reaser of Barnett Banks Inc. in Jacksonville, Fla.

In a separate report, the National Association of Realtors said sales of existing single-family homes edged up 2.1 percent to a 3.94 million annual rate in January.

In 1996, 4.08 million homes sold, the most since 1978.