US growth at 3.3 percent in second quarter of 2008

August 28th, 2008 - 9:16 pm ICT by IANS  

Washington, Aug 28 (DPA) The US economy grew at 3.3 percent in the second quarter of 2008, the government said Thursday in revised figures that showed strong international trade had helped stave off a feared recession.The gross domestic product (GDP) figure was revised upward from an earlier estimate of 1.9 percent for the quarter, the Bureau of Economic Analysis (BEA) said.

Thursday’s revision was up 1.4 percentage points, or $39.7 billion, from an estimate last month on increases in exports and private inventory investment and a downward revision to imports, the BEA said.

US consumption, which makes up two-thirds of the economy, rose 1.7 percent from 0.9 percent growth in the previous quarter. Exports increased 13.2 percent in the quarter, up from 5.1 percent growth in the first quarter of the year, while imports fell 7.6 percent after dipping 0.8 percent in the earlier quarter.

Still, economists warned a decrease in demand for US goods abroad and slower domestic spending could yet bring about a recession spurred by a crisis in the housing and credit markets.

“The overwhelming story is that the export numbers have offset this domestic weakness in consumer spending and business investment,” John Silvia of Wachovia Corp told Bloomberg financial news before the figures were released, warning of “a domestic recession”.

The concerns mirrored statements by the US central bank, which signalled in minutes released earlier this week that it expected economic growth to remain “damped for several quarters”, and also signalled it could raise interest rates on “significant concerns” about rising prices.

The growth was more than triple the 0.9 percent rise in the first quarter and followed a contraction of 0.2 percent in the final quarter of 2007.

The BEA is to release its final GDP figures for the quarter Sep 26.

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