Cross Timbers Business Report, Volume 10, Number 1, Fall 1996 Page: 1
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Cross Timbers Business Report
Published by Tarleton State University, William L. Beaty, EditorVolume 10, No. 1
Fall, 1996
GDP Growth Slows in Third Quarter
Real Gross Domestic Product, the
inflation-adjusted measure of the nation's
output of goods and services rose at a
seasonally-adjusted 2.2 percent annual rate in
1996's third quarter. This gain is less than half
the second quarter's 4.6 percent growth rate.
More significantly, key elements of last pe-
riod's figures raised concerns about the econ-
omy's continued expansion.
According to the latest data available from
the Commerce Department, real gross domes-
tic product was $6,929.7 billion in the third
quarter. This figure represents an annual gain
of 2.2 percent when compared to the previous
period and is 2.4 percent above the figure for
1995's third quarter.
Although these values fall within the 2.0 to
2.5 percent growth goal purportedly used by
the Federal Reserve in setting monetary policy,
certain elements of this expansion trouble
some analysts. Probably the main cause of
concern is a large stockpiling of inventories. IfREAL GROSS DOMESTIC PRODUCT
Annual Change Rates
Percent
5 4.6
4' .5
3
2.2 2.2
2
1 10.5
03 04 01 02 03
1995 I 1996
Source: U.S. Department of Commerce
an inventory buildup is used to support higher
final sales, this development would not be
troubling. However, since consumer and
government purchases of goods and services
were weak last quarter, much of this increase
was probably unintentional. An unintentional
inventory increase implies lower orders, which
can mean still lower growth in future periods.
Another element contributing to the third
quarter's weakness was an increase in the
trade deficit. Residential construction values
were also lower. A substantial rise in nonresi-
dential investment offset these statistics some-
what. The Commerce Department collects
and reports domestic product statistics on a
quarterly basis. The most recently released
numbers are subject to revision as more com-
plete data become available.Editor's Note
This issue marks the continuation of the
Cross Timbers Business Report following a
year of inactivity. I regret any inconvenience
this lapse in publication may have caused, but
an unexpected increase in professional duties
made this action unavoidable. A restructuring
of my teaching duties for the 1996-1997 aca-
demic year makes it possible to renew publica-
tion on the same quarterly schedule of earlier
years. I hope you find this publication to be
useful and enjoyable.
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Tarleton State University. Department of Social Sciences. Cross Timbers Business Report, Volume 10, Number 1, Fall 1996, periodical, Autumn 1996; Stephenville, Texas. (https://texashistory.unt.edu/ark:/67531/metapth298207/m1/1/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Tarleton State University.