US economy grows 3.5 percent in third quarter
October 29th, 2009 - 8:13 pm ICT by IANS
Washington, Oct 29 (DPA) The US economy grew a surprising 3.5 percent in the third quarter of 2009, according to government figures Thursday, likely ending the country’s worst recession in decades.
The annualized gross domestic product (GDP) rate was higher than the 3.2 percent predicted by economists, according to a survey by Bloomberg News. The world’s largest economy contracted 0.7 percent in the previous quarter.
The new growth figures cap months of improving news about the state of the US economy. Financial firms have reported billions of dollars in profits - a year after many were on the brink of collapse - while housing sales and consumer spending are stabilizing.
The Commerce Department said the improvement was led by higher consumer demand, exports, increased company inventories, government spending and an uptick in the housing market.
Yet the difficult times will likely continue for much of the population. Unemployment sits at 9.8 percent, the highest in 28 years, and is expected to reach 10 percent in 2010. The jobless rate has doubled since the recession began, as 7.6 million people have lost their jobs.
“It’s certainly our hope that we’ll demonstrate for the first time … in more than a year growth in our economy,” White House spokesman Robert Gibbs said Wednesday. “We still have, in the president’s mind, much work to do and to ensure an environment that is helping to create jobs.”
President Barack Obama’s administration has credited massive public spending with helping to pull the economy out of its longest recession since the Great Depression of the 1930s.
But some economists fear that government spending has pushed the US budget deficit to unsustainable levels, and warn that the country could experience another decline in growth when the $787-billion stimulus, approved in February, runs out.
Only about half of the stimulus money has been spent so far. Congress is currently debating extending some of its measures, including longer unemployment benefits and tax credits for home buyers.
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