October 18, 1985

''It is becoming clearer in the international community that terrorism is a menace to everyone.'' - Secretary of State George P. Shultz. [A10:3.]

The Economy The economy expanded at a 3.3 percent annual rate in the third quarter, somewhat faster than first estimated, the Commerce Department said. But most analysts saw the performance as mediocre. The growth reflected booming automobile sales and production, which are expected to slow in coming months, and big Government spending for farm price supports and military purchases. [Page A1.] Housing construction fell 9.3 percent in September, the steepest drop since May. Many analysts said the downturn was a one-month aberration. [D1.] Manufacturers cut back operations to 80.2 percent of capacity in September, the Fed said. [D22.] President Reagan said he was running out of time to win public support for changes in the tax system. [D1.]

The nation's economy expanded at a 3.3 percent annual rate during the third quarter, somewhat faster than earlier estimated, the Commerce Department said today. Although the economic growth rate for the quarter was triple that of the first six months of the year, most analysts viewed the rebound as only a mediocre performance of uncertain durability. ''It's just a moderate pickup,'' said Walter M. Cadette, a vice president at the Morgan Guaranty Trust Company. ''The economy does not have a great deal of punch behind it.''

The crisis affecting the United States semiconductor industry claimed its first major victim yesterday, when the United Technologies Corporation announced the closing of its Mostek Corporation subsidiary. The move would take effect immediately, United Technologies said. However, late yesterday, executives of Mostek issued a memorandum to employees saying they were ''actively pursuing options to maintain an ongoing downsized business'' independent of United Technologies. One of the options being studied, according to a United Technologies spokesman, is a leveraged buyout of part of Mostek's business.

International Italy's Prime Minister resigned after making a dramatic speech to Parliament in which he spoke of his ''bitterness'' over American actions after the hijacking of the liner Achille Lauro. In his address, Bettino Craxi also asserted that an unauthorized United States aircraft had followed a plane taking a senior Palestinian official and an associate from Sicily to Rome. [Page A1, Column 6.] The U.S. hopes to keep friendly ties with Italy but has no regret for its actions that precipitated the resignation of Prime Minister Craxi, according to a spokesman for the Reagan Administration. [A1:5.]