By DPA,
Washington: The US economy grew at an annual rate of 2.8 percent in the third quarter of this year, according to an updated government estimate Tuesday that confirmed the US has likely emerged from its deepest recession in decades.
The figure was revised down from the Commerce Department’s first estimate of 3.5 percent. The lower number was expected by economists, and the result of worse-than-predicted consumer spending and a widening US trade deficit in September.
The US economy, the world’s largest, shrank 0.7 percent in the second quarter and a massive 6.4 percent in the first three months of 2009 in the depths of the recession, which began in December 2007.
The third quarter marked the first growth period since the second quarter of 2008 and was mostly due to higher consumer spending, exports and massive government spending to revive the economy.
Consumer spending, which accounts for about two thirds of the country’s economic output, climbed 2.9 percent after falling 0.9 percent in the second quarter. Exports surged 17 percent in the third quarter after falling by 4.1 percent in the previous three months.
Rebecca Blank, undersecretary of commerce, said she expected growth would continue in the last three months of this year, with public spending and “increasing economic health spurring growth in many sectors of the economy”.
But Nigel Gault, the chief US economist of IHS Global Insight, said the downward revision suggested “the recovery did not begin as strongly as first thought”.
“The evidence is still positive and continues to point to a nascent recovery, but the feeble strength of spending in the recovery clearly suggests that strong policy support will be needed for some period of time,” Gault told Bloomberg News.
Most economists believe the country’s worst recession since the Great Depression of the 1930s ended towards the beginning of the summer months.