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US growth revised down for third quarter | US growth revised down for third quarter |
(40 minutes later) | |
The US economy grew at a slower pace than previously estimated in the three months to the end of September. | The US economy grew at a slower pace than previously estimated in the three months to the end of September. |
Revised figures from the US Commerce Department show gross domestic product grew at an annual pace of 2% in the period, down from the previous estimate of 2.5%. | Revised figures from the US Commerce Department show gross domestic product grew at an annual pace of 2% in the period, down from the previous estimate of 2.5%. |
Despite the downward revision, the quarter's growth was still up from the April-June period's 1.3% figure. | Despite the downward revision, the quarter's growth was still up from the April-June period's 1.3% figure. |
The revision was largely due a prior over-estimate of restocking by firms. | The revision was largely due a prior over-estimate of restocking by firms. |
Japan's earthquake seriously disrupted the global supply chain earlier in the year. High energy prices have also weighed heavily on consumer spending. | Japan's earthquake seriously disrupted the global supply chain earlier in the year. High energy prices have also weighed heavily on consumer spending. |
However, continued restocking and lower fuel prices recently, has led economists to speculate that US fourth-quarter growth could rise to an annualised rate of more than 3%, which would be the fastest in 18 months. | |
Vimombi Nshom, economist at IFR Economics, said: "Although growth was downsized, it's still the strongest showing of 2011, with GDP's largest component - consumer spending - holding on to its developments from Q2." | Vimombi Nshom, economist at IFR Economics, said: "Although growth was downsized, it's still the strongest showing of 2011, with GDP's largest component - consumer spending - holding on to its developments from Q2." |
Consumer spending growth was revised slightly down to 2.3% from 2.4%, but it was still the quickest pace since the fourth quarter of 2010. | |
The Commerce Department said that after-tax corporate profits increased at a 3% rate after rising 4.3% in the second quarter. | |
Export growth was stronger than previously estimated, rising at a 4.3% rate instead of 4%. Imports increased at a much slower 0.5% rate rather than 1.9%. | |
'Disappointing' | |
The report showed that real disposable income fell 2.1% in the third quarter after declining 0.5% in the prior three months. | |
There were also small revisions to business investment, which rose at a 14.8% rate instead of 16.3%. | |
Despite the latest GDP data being broadly welcomed by many analysts, Michael Mullaney, fund manager at Fiduciary Trust, said: "This is somewhat disappointing. | |
"The positives are that personal consumption is still OK, but I'm concerned because that seems to be coming at the expense of personal savings. | |
"We're in the camp that there's at least a 50% chance of a double dip so it doesn't surprise us that the number is softer." |
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