The US economy cooled in the third quarter but underlying consumer demand remains strong as the Federal Reserve considers its first interest rate hike in nine years.

The Commerce Department reported Thursday that gross domestic product—the broad measure of goods and services—expanded at an annual rate of 1.5 percent in the July-September period, following a robust 3.9 percent pace in the second quarter.

“That subpar number should not be mistaken for slower underlying growth. Much of the weakness stemmed from the onset of a long-awaited correction to private inventories,” said Nariman Behravesh, chief economist at IHS.

In a positive sign, third-quarter growth mainly reflected solid consumer spending, which accounts for two-thirds of US output, as consumers found themselves with a lot more disposable income than in the second quarter.

Consumer spending rose at an annual rate of 3.2 percent in the third quarter, slowing somewhat from a 3.6 percent increase in the prior quarter. 

Consumers were not only buying automobiles, as seen in robust sales reported by automakers, but were spending more on furniture, housing and utilities, and health care.