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Sunday 31st of January 2010
January 29, 2010    

US to report Q4 GDP figures today

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by Kay Murchie
US to report Q4 GDP figures today

The world’s largest economy is to report its economic growth figures today for the final three months of 2009.

Economists are forecasting growth of around 4.6% in the fourth quarter on an annualised basis, up from 2.2% in the previous quarter.

The US economy emerged from recession in the third quarter after enduring the longest and deepest downturn since the Great Depression of the 1930s.

Figures yesterday showed that US jobless claims fell last than expected. The unemployment rate is currently at 10% and US President Barack Obama has pledged to make job creation his top priority.

The key figure is the unemployment rate even the economy is growing, according to Clarence Chu of Hudson Capital Energy in Singapore. “Until I see that the US is consistently creating jobs for a few months in a row, I’m not convinced that demand will increase,” he said.

However, another area of concern is the housing market, the worry is that the recovery might be faltering.

This week, the Commerce Department revealed a fall in sales of new homes in the US for the month of December - the second consecutive month that sales have fallen.

According to the Commerce Department, new single-family home sales dived by 7.6% to a seasonally adjusted annual rate of 342,000 units, down from a revised 370,000 in the previous month.

In addition, the National Association of Realtors (NAR) this week revealed a sharp fall in sales of previously owned homes in the US for the month of December.

The NAR said sales fell 16.7% to an annual rate of 5.45 million units in December, down from 6.54 million the previous month. Analysts had expected a rate of 5.90 million units.

However, on a positive note, house prices are on the up. The Standard & Poor’s/Case-Shiller composite index of 20 metropolitan areas rose for the sixth consecutive month in November.

According to the index, house prices were 0.2% higher compared with the October.

Furthermore, consumer confidence in the US rose for the third consecutive month in January - its highest level in over a year.

The closely-watched US Conference Board‘s Consumer Confidence Index rose to 55.9 in January, up from 53.6 in December.

A level of 50 on the Confidence Index is the minimum to indicate a healthy economy.

The figures are closely monitored because consumer spending makes up for more than two-thirds of overall economic activity in the US.

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