US economic growth rises in Q3

| October 28, 2011 | 0 Comments

The world’s largest economy expanded at its fastest pace in a year in the three months to the end of September, official figures revealed today.

According to the Commerce Department, the US economy grew at an annualised rate of 2.5% in the third quarter of this year.

The figure was in line with forecasts but was a considerable improvement on the 1.3% growth reported for the second quarter.

Today’s figures will be a welcome boost for the economy which looked set to be heading towards a double dip recession just a few weeks ago.

The strong performance was due to a rise in consumer and business investment spending, as well as international trade.

Consumer spending was the strongest since the fourth quarter of last year, while business spending was the fastest in over a year.

Consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

However, despite today’s encouraging figures, it appears that consumers are still wary about the future direction of the economy.

Earlier this week, the Conference Board revealed US consumer confidence slumped in October.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

The economic recovery in the US has so far been sluggish in the face of higher unemployment and a depressed housing market.

Today, however, a separate report from the Labor Department revealed new claims for state unemployment benefits declined by 2,000 last week to a seasonally adjusted 402,000 – suggesting a steady improvement in the labour market.

In addition, yesterday a report suggested house prices were stabilising.

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