Third-Quarter Growth Revised to 2.1%

Fatter inventories cushioned the economy’s third-quarter slowdown, the Commerce Department said, holding it on a path of modest expansion that seemed set to carry into 1997. Gross domestic product grew at a revised 2.1% annual rate in the quarter, less than half the 4.7% pace in the second quarter, but fractionally higher than the 2% rate estimated a month ago, the department said in its second and last report on third-quarter performance. Analysts said the slower rate of growth in the third quarter was healthy and that while growth going forward would probably be modest, that was preferable to faster growth that could fuel a pickup in inflation. During the third quarter, businesses of all types boosted inventories by $34.5 billion instead of the $32.8 billion previously estimated, the department said. That was nearly five times the $7.1-billion inventory buildup in the second quarter and helped buoy growth in the third quarter. . . . Separately, Federal Reserve officials voted unanimously at their November meeting to hold interest rates unchanged, according to minutes of the session released Friday. . . . National Economic Council Chairman Laura D’Andrea Tyson said President Clinton’s new budget will not include revisions in the way the consumer price index is calculated. She said, though, that after further study it is possible the CPI measure could be modified during negotiations with Republican congressional leaders over the fiscal 1998 budget. Tyson’s comments suggest there will not be a quick fix of the CPI.