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Monday 07th of February 2011
January 28, 2011    

US economy sees Q4 growth of 3.2%

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by Kay Murchie

The Commerce Department has today revealed US economic growth for the fourth quarter expanded by an annualised 3.2% - boosted by consumer spending.

However, the rate of growth was slightly lower than the 3.7% expected by analysts but follows growth of 2.6% in the third quarter.

Meanwhile, the world’s largest economy grew by 2.9% in the whole of 2010 - the strongest year of growth since 2005.

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

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

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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