Economy Grows at Fastest Pace in 1 1/2 Years

The U.S. economy turned in a remarkably strong performance in the summer despite surging energy prices and the battering the Gulf Coast states took from hurricanes, although business growth was slightly lower than the government previously estimated. The Commerce Department reported Wednesday that the gross domestic product, the nation's total output of goods and services, rose at an annual rate of 4.1 percent in the July-September quarter. It was the fastest pace of growth in 1 1/2 years.

While down slightly from the 4.3 percent GDP estimate made a month ago, the new figure demonstrated that the economy kept expanding at a strong pace during the summer, led by solid increases in consumer demand, especially for autos, and business investment.

The third quarter performance was up substantially from a 3.3 percent GDP growth rate in the April-June quarter and was the best showing since the economy expanded at a 4.3 percent rate in the first three months of 2004.

The Bush administration, which has been on a concerted campaign to highlight the economy's strong points to bolster the president's approval ratings, said the 4.1 percent GDP growth rate was evidence of a vibrant economy.

"Today's GDP is more proof that businesses are booming and investors are confident," Commerce Secretary Carlos Gutierrez said in a statement. "The U.S. economy demonstrated its resilience in the last several months."