US April-June GDP growth rises to 2.5%
30 Aug 2013 11:24 PM GMT
Contrary to expectations, US economy accelerated more quickly in the second quarter, thanks to a surge in exports, which paves the way for the Federal Reserve to taper economic stimulus programme, according to news agency .
As reported by a news agency, gross domestic product grew at a 2.5 per cent annual rate, according to revised estimates for the period that were released by the Commerce Department on Thursday. The quarter's growth rate was more than double the pace clocked in the prior three months.
The report could boost confidence that the economy is turning a corner despite government austerity measures. At the same time, it is also not to be forgotten that a full recovery from the 2007-09 recession is probably years away as the US jobless rate remains historically high at 7.4 per cent.
The government had initially estimated that GDP expanded at a 1.7 per cent rate in the second quarter. But recent data on trade showed that exports climbed during the period at their fastest pace in over two years.
The government also said data from retailers showed that businesses had restocked their shelves at a faster pace in the April-June period than initially estimated.
According to a news agency, many economists expect the economy will accelerate further in the second half of the year as austerity measures begin to weigh less on national output.
That drag was evident in the second quarter, when spending contracted at all levels of government. Indeed, Thursday's data showed the economic drag from spending cuts was greater in the second quarter than initially estimated.
Still, the data could make officials at the US central bank more confident in their plan to begin reducing monthly bond purchases later this year. The program has reduced borrowing costs and helped spark a recovery in the nation's housing market, which collapsed during the recession.
In the April-June, investments in housing accounted for nearly a fifth of the economy's growth during the period.
However, other reports have suggested that housing began to look more shaky toward the end of the quarter. Expectations that the Fed could reduce bond buying as early as next month have driven mortgage rates sharply higher since May.
The bond-buying programme is one of America's last major economic stimulus programmes, as the Federal government's fiscal austerity began dragging on the economy in late 2010. In the quarter, higher taxes appeared to hold consumers back. Consumer spending, which accounts for more than two-thirds of US economic activity, slowed to a 1.8 per cent growth pace after rising at a 2.3 per cent rate in the first quarter. ag
As reported by a news agency, gross domestic product grew at a 2.5 per cent annual rate, according to revised estimates for the period that were released by the Commerce Department on Thursday. The quarter's growth rate was more than double the pace clocked in the prior three months.
The report could boost confidence that the economy is turning a corner despite government austerity measures. At the same time, it is also not to be forgotten that a full recovery from the 2007-09 recession is probably years away as the US jobless rate remains historically high at 7.4 per cent.
The government had initially estimated that GDP expanded at a 1.7 per cent rate in the second quarter. But recent data on trade showed that exports climbed during the period at their fastest pace in over two years.
The government also said data from retailers showed that businesses had restocked their shelves at a faster pace in the April-June period than initially estimated.
According to a news agency, many economists expect the economy will accelerate further in the second half of the year as austerity measures begin to weigh less on national output.
That drag was evident in the second quarter, when spending contracted at all levels of government. Indeed, Thursday's data showed the economic drag from spending cuts was greater in the second quarter than initially estimated.
Still, the data could make officials at the US central bank more confident in their plan to begin reducing monthly bond purchases later this year. The program has reduced borrowing costs and helped spark a recovery in the nation's housing market, which collapsed during the recession.
In the April-June, investments in housing accounted for nearly a fifth of the economy's growth during the period.
However, other reports have suggested that housing began to look more shaky toward the end of the quarter. Expectations that the Fed could reduce bond buying as early as next month have driven mortgage rates sharply higher since May.
The bond-buying programme is one of America's last major economic stimulus programmes, as the Federal government's fiscal austerity began dragging on the economy in late 2010. In the quarter, higher taxes appeared to hold consumers back. Consumer spending, which accounts for more than two-thirds of US economic activity, slowed to a 1.8 per cent growth pace after rising at a 2.3 per cent rate in the first quarter. ag
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