US economy grew 2.5 percent in third quarter

Washington, Oct 28 (IANS/EFE) Spurred by robust consumer spending, US gross domestic product grew at an annualised rate of 2.5 percent in the third quarter, the Commerce Department said Thursday in an initial calculation.

The figure, which is subject to revision, represents a big improvement over the first quarter’s 0.4 percent growth and an expansion of only 1.3 percent in the April-June period.

Those discouraging GDP numbers caused concern about the durability of the recovery from the worst economic slump since the Great Depression, and some economists warned of a possible double-dip recession.

The rebound in the third quarter was due to a 2.4 percent gain in consumer spending – the largest increase since the end of last year – and a rise of 16.3 percent in business investment.

The other side of the advance in consumer spending was a decline in the savings rate to 4.1 percent, its lowest level since the fourth quarter of 2007.

Thursday’s report from the Commerce Department also showed that after-tax inflation-adjusted personal income fell in June-September at an annualized rate of 1.7 percent, the worst performance in two years.

Though the US economy created 103,000 net new jobs last month, unemployment remained unchanged at 9.1 percent. The rate has been above 8 percent since February 2009, the longest period of elevated joblessness since 1948.

IANS