US Q3 economic growth figures revised upwards

| December 22, 2010 | 0 Comments

The Commerce Department has today revealed the US economy grew by an annualised 2.6% in the July to September period – slightly higher than the second estimate of 2.5% but much faster than the first estimate of 2%.

However, the growth rate was less than the 3% most analysts had expected.

Today’s estimate is the third and final reading, while the first estimate of fourth quarter growth will be available in late January.

Meanwhile, GDP was revised upwards due to a rise in the pace of businesses building up inventories and stronger exports.

However, this gain was offset by a downward revision to consumer spending, which grew at an annual 2.4% in the three-month period - lower than a previous estimate of 2.8%.

Consumer spending is closely monitored as it accounts for approximately 70% of total economic output.

Meanwhile, the biggest hurdle facing the US currently is the rising unemployment rate – which climbed 0.2% last month to 9.8%.

The rate has now exceeded the 9% mark since May 2009 – the longest period of time on record.

The unemployment figures continue to raise fears for the strength of the US economic recovery.

In related news today, the Office for National Statistics (ONS) revealed the UK economy grew by 0.7% in the July to September period – down from its previous estimate of 0.8%.

On an annual basis, meanwhile, growth was also revised down to 2.7% from 2.8%. Both figures surprised economists who had expected quarterly and annual growth to remain unchanged.

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