Economy’s growth rate cools, but stays impressive at 3.5%

Report shows the best back-to-back quarters in 4 years.

WASHINGTON — The U.S. economy slowed in the third quarter to a still-strong 3.5 percent annual growth rate, the Commerce Department said in its final assessment of economic health before the November congressional elections.

Growth dipped from the second quarter’s 4.2 percent rate, but the economy still posted its best back-toback quarters in four years.

The Commerce report comes as President Donald Trump this week again said Federal Reserve Chairman Jerome Powell was at fault for raising interest rates, calling the nation’s central bank the “biggest risk” to continued growth.

“The economy is still growing significantly above its potential, which is pretty remarkable,” said economist Michael Strain of the American Enterprise Institute, citing an expansion that has not experienced a recession since 2009.

With the unemployment rate at its lowest mark since 1969, the Fed has been raising interest rates to prevent annual inflation from taking off. Prices now are rising at an annual rate of 2 percent, according to the Fed’s preferred gauge.

While the economic report is good news for the president, it will likely provide only a limited political boost for Republicans, according to Matt McDonald, a partner at Hamilton Place Strategies who worked as a White House communications aide for President George W. Bush.

“Where the administration has struggled is in tying the low unemployment rate and strong economy to any actions they’ve taken, like the tax cut,” he said.

The latest economic report card capped a week of mixed economic news. On Thursday, the Census Bureau said new orders for durable goods rose a better-than-expected 0.8 percent in September. And the labor market remained strong with new claims for unemployment insurance remaining near half-century lows, according to a separate Labor Department report.

But with mortgage rates topping 5 percent, the housing market showed signs of weakening. Sales of new single-family homes last month fell 5.5 percent from the previous month to a seasonally-adjusted annual rate of 553,000, the fourth consecutive monthly drop.

ALAN DIAZ / AP 2017 One downside in this week’s economic data came in the housing market, which is showing signs of weakening.