US Economy grows at strong 3.8% rate in Q3
October 28, 2005, 9.20 pm (Singapore time)
US economy grows at strong 3.8% rate in Q3
WASHINGTON - Economic activity expanded at an energetic 3.8 per cent annual rate in the third quarter, providing vivid evidence of the economy's stamina even as it coped with the destructive forces of hurricanes Katrina and Rita.
The latest snapshot of the country's economic performance, released by the Commerce Department on Friday, even marked an improvement from the solid 3.3 per cent pace of growth registered in the second quarter.
Growth in the third quarter was broad-based, reflecting brisk spending by consumers, businesses and government.
The expansion in gross domestic product in the July-to-September quarter, the strongest since the beginning of the year, also exceeded many analysts' expectations. Before the report was released, they were forecasting the economy to clock in at a 3.6 per cent annual rate.
GDP measures the value of all goods and services produced within the United States and is the best barometer of the nation's economic fitness.
Katrina, the costliest natural disaster in US history, struck in late August; Rita hit in late September. Both hurricanes destroyed businesses and homes and choked the flow of trade. They also hobbled essential oil and gas facilities, catapulting energy prices higher and fanning inflation fears.
An inflation gauge tied to the GDP report showed overall inflation picking up in the third quarter. But excluding food and energy prices, 'core' inflation - something the Federal Reserve pays close attention to - actually moderated. Core inflation rose at a rate of 1.3 per cent in the third quarter, down from a 1.7 per cent pace in the second quarter.
Despite the sting of high energy bills, consumers continued to spend, doing their part to keep the economy rolling in the third quarter.
Consumers' boosted spending at a brisk 3.9 per cent rate, the strongest pace since the end of last year. That spending reflected a big appetite for big-ticket 'durable' goods, such as cars, which had been discounted and promoted to lure buyers. Some analysts believe consumer spending probably will moderate, but still remain healthy, in the months ahead.
Businesses increased spending on equipment and software at an 8.9 per cent pace in the third quarter, on top of a 10.9 per cent growth rate in the prior quarter.
Spending by the federal government, which analysts believe included some outlays due to the hurricanes, rose at a 7.7 per cent rate in the third quarter, the fastest pace since the first quarter of 2004.
US economy grows at strong 3.8% rate in Q3
WASHINGTON - Economic activity expanded at an energetic 3.8 per cent annual rate in the third quarter, providing vivid evidence of the economy's stamina even as it coped with the destructive forces of hurricanes Katrina and Rita.
The latest snapshot of the country's economic performance, released by the Commerce Department on Friday, even marked an improvement from the solid 3.3 per cent pace of growth registered in the second quarter.
Growth in the third quarter was broad-based, reflecting brisk spending by consumers, businesses and government.
The expansion in gross domestic product in the July-to-September quarter, the strongest since the beginning of the year, also exceeded many analysts' expectations. Before the report was released, they were forecasting the economy to clock in at a 3.6 per cent annual rate.
GDP measures the value of all goods and services produced within the United States and is the best barometer of the nation's economic fitness.
Katrina, the costliest natural disaster in US history, struck in late August; Rita hit in late September. Both hurricanes destroyed businesses and homes and choked the flow of trade. They also hobbled essential oil and gas facilities, catapulting energy prices higher and fanning inflation fears.
An inflation gauge tied to the GDP report showed overall inflation picking up in the third quarter. But excluding food and energy prices, 'core' inflation - something the Federal Reserve pays close attention to - actually moderated. Core inflation rose at a rate of 1.3 per cent in the third quarter, down from a 1.7 per cent pace in the second quarter.
Despite the sting of high energy bills, consumers continued to spend, doing their part to keep the economy rolling in the third quarter.
Consumers' boosted spending at a brisk 3.9 per cent rate, the strongest pace since the end of last year. That spending reflected a big appetite for big-ticket 'durable' goods, such as cars, which had been discounted and promoted to lure buyers. Some analysts believe consumer spending probably will moderate, but still remain healthy, in the months ahead.
Businesses increased spending on equipment and software at an 8.9 per cent pace in the third quarter, on top of a 10.9 per cent growth rate in the prior quarter.
Spending by the federal government, which analysts believe included some outlays due to the hurricanes, rose at a 7.7 per cent rate in the third quarter, the fastest pace since the first quarter of 2004.
posted by SmartYInvestor at 10:04 PM
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