Economy Grew Modestly in July-Sept. Quarter

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New information shows the U.S economy grew at a moderate pace during the summer.

The Commerce Department reported U.S. gross domestic product increased at a 2.6 percent annual rate in the third quarter. Businesses spent more to build inventories.

Many analysts think the economy is growing at an even greater pace because consumers are spending more freely again.

Even if analysts are right, the economy still won't be growing quickly enough to make a noticeable dent in unemployment.

By some estimates, the economy would need to grow by 5 percent for a full year to push down the unemployment rate by a full percentage point. But for all of this year, the economy is expected to expand by only 2.8 percent.

Consumers boosted their spending at a 2.4 percent pace. That was down from a 2.8 percent growth rate previously estimated.

Even so, consumers increased their spending at the fastest pace in four years. The slight downward revision reflected less spending on health care and financial services than previously estimated.

More recent reports from retailers, however, show that shoppers are spending at a greater rate in the final months of the year.

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