JPMorgan slashes Q3 GDP estimate to 1 pct from 1.5 pct on weak data

JP Morgan economists lowered tracking GDP for the third quarter to 1 percent from 1.5 percent, based on an inventory correction that is seriously denting growth in the period.

August business inventories came in unchanged for a second month, reversing a period of business stockpiling in the first half.

The economists said the stockpiling is rapidly correcting. "As a result it now looks like the current inventory correction is subtracting about 1.7 (percentage points) from growth in the third quarter."

"The silver lining is that the bulk of the necessary and expected slowing in the pace of inventory accumulation may be getting behind us, removing a possible headwind to growth," they added in a note.

JP Morgan's tracking forecast is now at the low end of the street range.

According to the CNBC/Moody's Analytics rapid update, the median forecast for third quarter growth is 1.7 percent. Goldman Sachs later said it was maintaining its 1.2 percent forecast.

Click here for the latest on the markets.