GDP Grows at 3.9% Clip Despite Housing Crunch

GDP tops estimates on increased consumer spending
By Kevin Spak,  Newser Staff
Posted Oct 31, 2007 11:27 AM CDT
GDP Grows at 3.9% Clip Despite Housing Crunch
U.S. Federal Reserve Chairman Ben Bernanke waits for the start of the International Monetary and Financial Committee meeting at International Monetary Fund Headquarters in Washington, Saturday, Oct. 20, 2007. (AP Photo/J. Scott Applewhite)   (Associated Press)

The US economy grew at a brisk 3.9% pace in the third quarter despite the credit and housing turmoil buffeting Wall Street, according to Commerce Department figures released today. Overall construction spending was up—with record commercial and government spending offsetting the housing slide—while individuals increased spending 3% and employment held steady. “This is an extremely resilient economy,” one economist said.

The 3.9% GDP growth is the strongest showing in a year and a half, far exceeding analysts’ 3.1% prediction. The report comes as the Federal Reserve meets to discuss interest-rate cuts. Analysts still expect a quarter-point reduction intended to insulate the economy against long-term effects from housing woes. The dollar rose and treasury notes declined after the GDP report. (Read more Fed funds rate stories.)

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