WASHINGTON — Buffeted by a deepening slump in the housing market, the U.S. gross domestic product — a bellwether of economic growth — slowed to a 2 percent pace in the third quarter, the Commerce Department reported Thursday.
That growth was less than the 2.2 percent estimate in last month’s preliminary numbers, and economists said the overall economic growth was anemic.
“The overall number is relatively weak,” said Carl Steidtmann, chief economist at Deloitte Research. “We’ve been experiencing growth in the last three years of 3.5 percent to 4 percent.”
The economy has been losing momentum all year and has not fully rebounded since Hurricane Katrina, which devastated the Gulf Coast region last November.
GDP growth, a measure of all goods and services produced within the U.S., hit its peak in the third quarter last year, when the annualized rate rose to 4.1 percent. The latest quarter of GDP growth, driven down by a significant slump in the housing market, has been reflected in tepid consumer spending and retail sales.
“Spending on new household items has diminished and a slowdown in mortgage refinancing translates into slower consumer spending,” Steidtmann said.
Sales at department stores and apparel and accessories retailers were flat in November, according to the latest government report, and many retailers have reported disappointing business leading up to Christmas.
Despite the economic slowdown, many economists don’t expect the economy to slide into a recession.
“The downward revision in the third-quarter GDP data was almost entirely due to the recession in housing,” Nariman Behravesh, chief economist at Global Insight, wrote in a report. “The spillover effects to other parts of the economy continue to be limited.”