US economic growth figures revised downwards

The Commerce Department today revealed that the world’s no.1 economy grew at a slower rate in the third quarter than previous estimates showed.

According to official figures, the US economy grew by 2.2% between the July and September period, rather than the 2.8% previously reported and the original estimate of 3.5%.

The figures come on the same day that the Office for National Statistics (ONS) revealed that the UK economy contracted by 0.2% in the July to September period - rather than the 0.3% previously reported and the 0.4% estimated in October.

On an annual basis, the UK economy has shrunk by 5.1% over the last year.

The UK’s revised figures still mean it is the first time the UK has endured six consecutive quarters without growth - the first time since the ONS began gathering the data in 1955.

Separately, the National Association of Realtors (NAR) has revealed a rise in sales of previously owned homes in the US for the month of November.

The industry body said sales surged 7.4% in November as a result of Government incentives including lower mortgage rates and the first-time buyer tax credit, which was recently extended.

Commenting on the figures, NAR chief economist Lawrence Yun, said: “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead.”

“We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010,” Mr Yun concluded.

Discuss this in the Finance Markets forums

Story link: US economic growth figures revised downwards