Car Sales Help GNP Post 1.8% Gain in Quarter

The U.S. economy grew at a stronger-than-expected 1.8% rate in the July-September quarter, boosted by consumer spending on cars and other items, the government reported today.

The Bush Administration said the report “contradicts those who believe we are in a recession or about to enter one,” but private analysts weren’t so sure.

The Commerce Department said the growth in the gross national product--the nation’s total output of goods and services--improved over a barely perceptible 0.4% annual rate during the second quarter.

The figures indicate the economy evaded the beginning of a recession. But that isn’t certain because the GNP report will be revised twice--in November and again in December--as more information becomes available.

Much of the improvement in the economy resulted from a 3.6% increase in consumer spending. Purchases of autos rose $3.4 billion, compared to a $6.1-billion decline in the second quarter, the Commerce Department said.

In advance of the report, a consensus of economists had expected a growth rate of just 0.8% from July through September.

Many analysts believe the economy has weakened in recent weeks and is slipping into a recession.