Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

France's top consumer group sues Internet giants

Read more

WEB NEWS

Web users pay tribute to South Korea ferry victims

Read more

AFRICA NEWS

A landslide victory for the 'invisible candidate' in Algeria's Presidential polls

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014 (part 2)

Read more

MEDIAWATCH

Presidential adviser resigns over "shoe-shine scandal"

Read more

#THE 51%

Breaking stereotypes

Read more

#TECH 24

Galaxy S5 v. HTC One (M8): Which is the right one for you?

Read more

FRANCE IN FOCUS

New PM Manuel Valls outlines priorities

Read more

  • Why Syria’s cash-strapped jihadists let hostages go

    Read more

  • Video: Ukraine separatist crisis overshadows Easter celebrations

    Read more

  • The Great War's unsung four-legged heroes

    Read more

  • Divers begin pulling bodies from sunken South Korean ferry

    Read more

  • Ukraine rebels call for Russian troops after deadly clash

    Read more

  • UK’s Hamilton cruises to victory at Chinese Grand Prix

    Read more

  • Freed French journalists arrive home after Syria ordeal

    Read more

  • Syria’s Assad visits recaptured Christian town at Easter

    Read more

  • In pictures: French kite festival takes flight

    Read more

  • Le Pen’s National Front fail to woo Britain’s Eurosceptics

    Read more

  • PSG clinch fourth League Cup title after beating Lyon

    Read more

  • Militants kill Algerian soldiers in deadly ambush

    Read more

  • Scores killed in South Sudan cattle raid

    Read more

  • VIDEO: Anti-Semitic leaflets in Eastern Ukraine condemned

    Read more

  • Bouteflika, the ghost president

    Read more

  • Does Valls’ upcoming Vatican trip violate French secularism?

    Read more

  • Ukraine separatists say ‘not bound’ by Geneva deal

    Read more

  • Abel Ferrara’s hotly awaited DSK film to premiere on web

    Read more

  • Obama signs bill to block controversial Iran diplomat from UN post

    Read more

  • Astronomers discover Earth-like planet that could support life

    Read more

  • In pictures: Iranian woman pardons son’s killer at the gallows

    Read more

Business

US economy grows faster than expected in third quarter

©

Text by News Wires

Latest update : 2012-12-20

The US economy grew by a 3.1% annual rate in the third quarter – faster than estimated – boosted by exports and government spending, however the gains may be hard to sustain with slowing global demand and tighter fiscal policy.

The U.S. economy grew faster than previously estimated in the third quarter as exports and government spending provided a lift, but that boost is likely to be lost amid slowing global demand and a move towards tighter fiscal policy.

A second report on Thursday suggested job growth remained modest, with first-time applications for state unemployment benefits rising last week. However, they were in the low end of their range before Superstorm Sandy struck in late October.

Gross domestic product expanded at a 3.1 percent annual rate, the Commerce Department said, a step-up from the 2.7 percent pace it reported last month.

It was the fastest growth since late 2011 and also reflected a slightly better pace of consumer spending than previously estimated. Economists had expected GDP growth would be raised to a 2.8 percent pace.

In a separate report the Labor Department said initial claims for jobless benefits increased 17,000 to a seasonally adjusted 361,000. The data covered the survey period for December nonfarm payrolls.

“The pace of hiring is still disappointing with firms concerned about the impact of the fiscal cliff on demand,” said Tanweer Akram, a senior economist at ING Investment Management in Atlanta, adding that the pace of GDP growth in the current quarter “remains quite soft.”

The so-called fiscal cliff refers to $600 billion in automatic government spending cuts and higher taxes that could be drained from the economy early next year unless an agreement is reached on a less punitive plan to reduce budget deficits.

Tighter fiscal policy and a cooling global economy could weigh on the domestic economy in the coming quarters.

Job gains so far this year have averaged 151,000 per month, a pattern that is likely to hold through December. The sluggish labor market is constraining spending.

Growth in the third quarter was revised higher to show a much faster pace of export growth and the first decline in imports in more than three years.

Exports grew at a 1.9 percent rate, rather than 1.1 percent, helping to narrow the trade deficit. Trade contributed 0.38 percentage point to GDP growth. The drop in imports is a sign of weak domestic demand.

Government spending was revised to a 3.9 percent growth rate from 3.5 percent, boosted by a rebound in state and local government outlays. It added three quarters of a percentage point to GDP growth in the third quarter.

While growth in consumer spending, which accounts for about 70 percent of U.S. economic activity, was raised by 0.2 percentage point to a 1.6 percent rate, that was mostly due to increased spending on healthcare.

Business inventories were trimmed to $60.3 billion from $61.3 billion. Restocking by businesses contributed 0.73 percentage point to GDP growth.

Given the sluggish spending pace, some of the inventory accumulation might have been unplanned, suggesting businesses will need to liquidate stocks this quarter because of weak demand.

Excluding inventories, GDP rose at a revised 2.4 percent rate. Final sales of goods and services produced in the United States had been previously estimated to have increased at a 1.9 percent pace.

Elsewhere, details of the report were mixed. Business spending was revised to show cutbacks that were not as sharp as previously reported. Business investment fell at a 1.8 percent rate instead of a 2.2 percent decline. That was the first drop since the first quarter of 2011.

Part of the drag in business investment, which had been a source of strength for the economy, came from equipment and software, where spending was the weakest since the second quarter of 2009.

The report also showed that after-tax corporate profits rose at a 2.5 percent rate in the third quarter rather than 3.3 percent.

(REUTERS)

Date created : 2012-12-20

  • USA

    US jobless rate hits four-year low as employment increases

    Read more

  • US ECONOMY

    US jobs growth in August falls below expectations

    Read more

  • US ECONOMY

    US economic growth slows in second quarter

    Read more

Comments

COMMENT(S)