U.S. economic growth slows, but outlook good for some sectors

The U.S. Department of Commerce (DOC) today announced that the gross domestic product (GDP) grew at a 1.6 percent annual rate in the third quarter, down from 2.6 in the second quarter, below the 2.1 percent forecast, and the slowest rate in more than three years.

The GDP measures the value of all goods and services produced within the U.S. and is a barometer of the country's economic standing.

Commenting on the announcement, former Chief Economist at the U.S. International Trade Commission Peter Morici said, "Looking forward, growth should pick up. Falling oil prices and the stock market rally are boosting consumer confidence, and fourth quarter retail sales growth should outperform the third quarter. Although residential construction is flagging, most components of commercial construction are likely to remain robust. Industrial capacity is reaching its limits, and investments in new structures, machinery, technology, and software are likely to remain robust. In 2007, further efforts to streamline and improve supply chain management will be a key driver."

Morici predicted that the economy likely will expand at about a 3 percent annual rate in the fourth quarter. He also said that firms making producer durables and services that boost productivity should do particularly well. Specifically, firms selling goods and services that improve supply chain management, collaborative technologies, and substitute communications for travel will do well, as will firms making fixtures for new commercial structures and manufacturing and office equipment.