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| US economy is growing once again | US economy is growing once again |
| (10 minutes later) | |
| The US economy grew at an annualised rate of 3.5% between July and September, its first expansion in more than a year, official data has shown. | The US economy grew at an annualised rate of 3.5% between July and September, its first expansion in more than a year, official data has shown. |
| Commentators say the growth was helped by President Obama's $787bn (£480bn) stimulus plan, and the fear is growth will now fall as this comes to an end. | Commentators say the growth was helped by President Obama's $787bn (£480bn) stimulus plan, and the fear is growth will now fall as this comes to an end. |
| The US economy was also lifted by the "Cash for Clunkers" car scrappage scheme, which finished in August. | The US economy was also lifted by the "Cash for Clunkers" car scrappage scheme, which finished in August. |
| But with unemployment still high, the ongoing recovery is set to be slow. | But with unemployment still high, the ongoing recovery is set to be slow. |
| Global good news | |
| The economic growth between July and September indicates that the US has likely exited a recession that first started in December 2007. | The economic growth between July and September indicates that the US has likely exited a recession that first started in December 2007. |
| This recovery is being led by federal spending and gradual recovery in consumer spending and business investment John Silvia, Wells Fargo class="" href="/2/hi/business/economy/8331116.stm">What next for UK economy? class="" href="/2/hi/business/8331110.stm">Pain continues for some class="" href="http://www.bbc.co.uk/blogs/thereporters/markmardell/">Hope is all that's left | |
| However, the official confirmation still has to come from the National Bureau of Economic Research, the agency which considers a number of factors in coming to its decision. | |
| The US economy last expanded in the second quarter of 2008, when it grew 2.4%. | The US economy last expanded in the second quarter of 2008, when it grew 2.4%. |
| BBC chief economics correspondent Hugh Pym said the 3.5% growth was more than the 3.3% expected by most commentators. | |
| "The sheer scale of the stimulus in the US has made a big difference, it was much bigger in percentage terms than that in the UK," he said. | |
| "That the US, the powerhouse of the world economy is growing once again, is good news for the global economy has a whole." | |
| 'Distorted by stimulus' | 'Distorted by stimulus' |
| "It's good to have the economy growing again," said Brian Bethune, economist at IHS Global Insight. | "It's good to have the economy growing again," said Brian Bethune, economist at IHS Global Insight. |
| You can say that the recession is over, but it sure won't feel like that Dean Baker, Centre for Economic Policy Research | You can say that the recession is over, but it sure won't feel like that Dean Baker, Centre for Economic Policy Research |
| "But we don't think that rate of growth is sustainable because it is distorted by all the government stimulus. | "But we don't think that rate of growth is sustainable because it is distorted by all the government stimulus. |
| "The challenge here is to get organic growth - growth that isn't helped by fiscal steroids." | "The challenge here is to get organic growth - growth that isn't helped by fiscal steroids." |
| Analysts cautious about the slow nature of the US economic recovery point to the fact that the unemployment rate currently stands at 9.8%, and that the labour market traditionally lags behind any wider economic recovery. | Analysts cautious about the slow nature of the US economic recovery point to the fact that the unemployment rate currently stands at 9.8%, and that the labour market traditionally lags behind any wider economic recovery. |
| They also highlight the fact that the big car firms have already reported a sharp fall in September sales following the conclusion of the popular $3bn cash for clunkers scheme at the end of September. | They also highlight the fact that the big car firms have already reported a sharp fall in September sales following the conclusion of the popular $3bn cash for clunkers scheme at the end of September. |
| This scheme gave people trading in old cars $3,500 towards the cost of a new vehicle, pushing car sales up strongly in both July and August. | This scheme gave people trading in old cars $3,500 towards the cost of a new vehicle, pushing car sales up strongly in both July and August. |
| "You can say that the recession is over, but it sure won't feel like that," said Dean Baker, co-director of the Centre for Economic Policy Research. | "You can say that the recession is over, but it sure won't feel like that," said Dean Baker, co-director of the Centre for Economic Policy Research. |
| "There is a lot of downward momentum that isn't going to go." | "There is a lot of downward momentum that isn't going to go." |