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US economy expands faster
By Jeannine Aversa |
November 24, 2010, Wednesday
|
Print Edition
Print Edition
THE United States economy grew slightly faster last summer than first thought, benefiting from stronger spending by American shoppers and improved overseas sales of US goods.
The US Commerce Department reported yesterday that the economy expanded at a 2.5 percent annual rate in the July-September quarter. That was better than the 2 percent pace initially estimated last month.
The pickup in growth comes after the economy slowed sharply in the spring, advancing at an anemic rate of just 1.7 percent. Still, the economy would need to grow at least twice as fast as it did in the third quarter to make a dent in the 9.6 percent unemployment rate.
That's why the Fed recently jumped in with a second round of stimulus. The Fed announced on November 3 that it will buy US$600 billion worth of government bonds.
The effort is aimed at getting Americans to spend more by making loans cheaper and by boosting stock prices. But no one, including Fed Chairman Ben Bernanke, thinks the program would create the robust growth needed to ratchet down the unemployment rate.
In the third quarter, consumers boosted their spending at a 2.8 percent pace, the most in nearly four years. That was a stronger showing than the 2.6 percent pace first estimated.
Even with the improvement, consumers would need to spend more to have a significant impact on the jobs market. That's because consumer spending accounts for roughly 70 percent of all national economic. It's the single-largest driver of economic activity.
Sales of US exports to foreign customers grew at a 6.3 percent pace in the third quarter, another factor in the third-quarter bump-up. That compared with a 5 percent growth rate first estimated. A weaker US dollar is helping those sales as American goods become cheaper and more attractive to foreign buyers.
Business spending on equipment and software grew 16.8 percent, from a 12 percent rise first estimated.
The US Commerce Department reported yesterday that the economy expanded at a 2.5 percent annual rate in the July-September quarter. That was better than the 2 percent pace initially estimated last month.
The pickup in growth comes after the economy slowed sharply in the spring, advancing at an anemic rate of just 1.7 percent. Still, the economy would need to grow at least twice as fast as it did in the third quarter to make a dent in the 9.6 percent unemployment rate.
That's why the Fed recently jumped in with a second round of stimulus. The Fed announced on November 3 that it will buy US$600 billion worth of government bonds.
The effort is aimed at getting Americans to spend more by making loans cheaper and by boosting stock prices. But no one, including Fed Chairman Ben Bernanke, thinks the program would create the robust growth needed to ratchet down the unemployment rate.
In the third quarter, consumers boosted their spending at a 2.8 percent pace, the most in nearly four years. That was a stronger showing than the 2.6 percent pace first estimated.
Even with the improvement, consumers would need to spend more to have a significant impact on the jobs market. That's because consumer spending accounts for roughly 70 percent of all national economic. It's the single-largest driver of economic activity.
Sales of US exports to foreign customers grew at a 6.3 percent pace in the third quarter, another factor in the third-quarter bump-up. That compared with a 5 percent growth rate first estimated. A weaker US dollar is helping those sales as American goods become cheaper and more attractive to foreign buyers.
Business spending on equipment and software grew 16.8 percent, from a 12 percent rise first estimated.
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