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U.S. Economy Picks up Steam in 3Q, Still at "Fragile Moment"
Oct 28,2011 09:00CST
industry news
Source:SMM
U.S. economic growth picked up pace to 2.5 percent in the third quarter of this year, easing recession jitters.

WASHINGTON, Oct. 28 (Xinhua) -- U.S. economic growth picked up pace to 2.5 percent in the third quarter of this year, easing recession jitters, but experts held that the economy was confronted with a slew of domestic and international challenges.

The growth rate of the real gross domestic product (GDP) in the June-September period was the best quarterly performance since the start of this year, a welcome relief for the world's largest economy, which was on the brink of a double-dip recession for the first half of the year.

The growth pace was in line with economists' expectations and was a big acceleration from the revised 1.3 percent growth rate in the second quarter.

"We are, nonetheless, at a fragile moment in the world economy, and cannot afford to do anything to undermine our economic recovery," Katharine Abraham, a senior White House economist,said Thursday in a White House blog article.

Stronger personal household consumption and business investment contributed to the GDP up-tick in the third quarter, the Commerce Department reported Thursday.

Real personal consumption expenditures rose 2.4 percent, a big improvement from a 0.7 percent growth in the second quarter. Real business investment rose 16.3 percent in the third quarter, compared with an increase of 10.3 percent in the second quarter.

Rising exports also helped pump up the economic expansion, with real exports of goods and services up 4 percent, compared with an increase of 3.6 percent in the second quarter.

Positive contributions to real GDP growth included consumer spending (1.7 percentage point), fixed investment (1.6 percentage point) and net exports (0.2 percentage point), while business inventory subtracted about 1.1 percentage point from real GDP growth, official data revealed.

However, economists said the higher growth was still not robust enough to make a significant dent in the painfully high unemployment rate, currently at 9.1 percent.

Abraham, a member of the White House Council of Economic Advisers, urged Congress to pass the administration's job plan to boost job creation and economic recovery.

U.S. President Barack Obama unveiled the jobs plan on Sept. 8, which includes measures like payroll tax cuts for employers and employees as well as new investment in infrastructure projects.

However, Republican Senators scuttled the jobs package on Oct. 11, and a portion of the bill, which provided 35 billion U.S. dollars to state and local governments to prevent layoffs of teachers, police officers and firefighters, failed to advance in the Senate on Oct. 20.

 

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