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Tuesday 01st of February 2011
January 28, 2011    

Stock markets await US GDP estimate

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by Kay Murchie
Stock markets await US GDP estimate

Global stock markets were lower today as investors awaited US fourth quarter economic growth figures.

Analysts expect the economy expanded at an annual rate of 3.5% in the final three months of 2010, after growth of 2.6% in the third quarter.

The US economic recovery appears to be gathering momentum after positive figures for the housing market this week and improved unemployment figures.

In addition, a pick up in consumer spending suggest a sustainable recovery is underway. Consumer spending accounts for approximately two-thirds of economic output in the US

Meanwhile, in terms of unemployment, the rate fell from 9.8% to 9.4% in December – representing the biggest one month drop since April 1998.

Meanwhile, in related news, official figures revealed the UK economy contracted by 0.5% in the October to December period.

The figures shocked economists who had expected growth of 0.5% following growth of 0.7% in the third quarter and 1.1% in the April to June period.

Analysts had expected economic growth to slow – in light of the Government’s massive spending cuts – designed to bring down the budget deficit.

Both sets of GDP figures for the US and the UK are the first of three and the figures could be revised up or down in the coming months.

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