US economic growth figures revised downwards
The Commerce Department today revealed that the world’s no.1 economy grew at a far slower rate in the third quarter than previous estimates showed.
According to official figures, the US economy grew by 2.8% between the July and September period, rather than the 3.5% previously reported.
Today’s figures confirm that the economy exited its worst recession for 70 years in the third quarter but the latest figures were slightly less than the 2.9% analysts had expected.
The revision in the GDP figures were partly due to the fact that imports outpaced exports during the period.
Imports rose almost 21% in the third quarter – representing the biggest rise since the second quarter of 1985.
However, one analyst warns of a fragile recovery. Independent market strategist TJ Marta, said: “The consumer still isn’t there. Other data suggest that the effect from ‘cash for clunkers’ and first-time home buyer credits are fading.”
“This will be a muted, slow recovery and it will be strewn with setbacks.”
In related news today, the closely-watched Conference Board’s Consumer Confidence Index rose slightly in November from a revised 48.7 in October to 49.5 this month.
A level of 50 on the Confidence Index is the minimum to indicate a healthy economy.
Worryingly, the Conference Board said income expectations were “very pessimistic” and consumers were in “a very frugal mood”, which raise concerns over Christmas spending this year.
Consumer spending makes up for more than two-thirds of overall economic activity in the US, so weak spending in the build-up to Christmas could be a worry for the world’s largest economy.