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Pace of US economic decline eases Pace of US economic decline eases
(about 6 hours later)
The US economy shrank at an annual pace of 1% in the April-to-June quarter, government figures have shown.The US economy shrank at an annual pace of 1% in the April-to-June quarter, government figures have shown.
The data was better than expected, but marked the longest period of decline since records began in 1947.The data was better than expected, but marked the longest period of decline since records began in 1947.
Analysts said the data suggested that the worst could be over for the US economy, which has now been in recession for a year.Analysts said the data suggested that the worst could be over for the US economy, which has now been in recession for a year.
However the figures for the January-to-March quarter were revised down to -6.4%. The previous estimate was -5.5%. However, the figures for the January-to-March quarter were revised down to -6.4%. The previous estimate was -5.5%.
The figures are worked out on an annualised basis, which reflects the change if continued at the current pace over a year.The figures are worked out on an annualised basis, which reflects the change if continued at the current pace over a year.
'Worst behind us''Worst behind us'
The figures show that the pace of contraction is slowing rapidly in the US, even more than in the UK.The figures show that the pace of contraction is slowing rapidly in the US, even more than in the UK.
"We're seeing signs of stabilisation in a lot of areas of the economy, so the worst is definitely behind us," said Scott Brown, chief economist at Raymond James & Associates."We're seeing signs of stabilisation in a lot of areas of the economy, so the worst is definitely behind us," said Scott Brown, chief economist at Raymond James & Associates.
ANALYSIS Steve Schifferes, economics reporter, BBC NewsANALYSIS Steve Schifferes, economics reporter, BBC News
The figures show that the pace of contraction is slowing rapidly in the US, even more than in the UK.The figures show that the pace of contraction is slowing rapidly in the US, even more than in the UK.
That reflects the effect of the stimulus package which has boosted government spending.That reflects the effect of the stimulus package which has boosted government spending.
However, it still could be a number of quarters before output recovers to the level before the downturn started.However, it still could be a number of quarters before output recovers to the level before the downturn started.
The severity of that downturn was emphasised by the downward revision of the first quarter's growth, making it one of the biggest quarterly economic drops in US history.The severity of that downturn was emphasised by the downward revision of the first quarter's growth, making it one of the biggest quarterly economic drops in US history.
The improved economic performance in the second quarter was largely due to government spending.The improved economic performance in the second quarter was largely due to government spending.
However, there were still falls in investment and personal consumption.However, there were still falls in investment and personal consumption.
Following the figures, White House spokesperson Robert Gibbs said: "Progress is being made but much work remains."Following the figures, White House spokesperson Robert Gibbs said: "Progress is being made but much work remains."
He said unemployment figures due out next week were likely to show that hundreds of thousands more jobs had been lost.He said unemployment figures due out next week were likely to show that hundreds of thousands more jobs had been lost.
The data prompted the Dow index to jump when trading opened, before falling back.The data prompted the Dow index to jump when trading opened, before falling back.
"The figures...may well set the tone for the next few weeks on the equity markets," said David Jones, chief market strategist at IG Index."The figures...may well set the tone for the next few weeks on the equity markets," said David Jones, chief market strategist at IG Index.