WASHINGTON: America’s exit from its deepest postwar recession during the autumn was less robust than originally believed according to figures released here yesterday. The figures show that the growth rate was trimmed by rising imports and weak commercial property.
The commerce department confirmed that the US broke a run of four quarters of declining output in the third quarter to show its strongest growth in two years, but gross domestic product had expanded at an annual rate of 2.8 per cent rather than the 3.5 per cent in its first estimate a year ago.
Yesterday’s data release comes on the eve of the second estimate of UK growth in the third quarter tomorrow, with analysts in
London expecting a slightly stronger performance than the 0.4 per cent decline announced in October.
The fragility of the UK economy was underlined yesterday when the Office for National Statistics reported a 3 per cent drop in investment during the three months to September — the fifth successive quarterly fall.
has dropped by more than
a fifth in the past year,
with manufacturing, construction and services all registering sharp declines.
The US calculates its economic statistics on a different basis from the UK’s, but yesterday’s figures suggest the American economy expanded by 0.7 per cent in the third quarter rather than 0.9 per cent. Growth was boosted by the “cash for clunkers” scheme to encourage consumers to buy new cars and by government tax breaks for house purchases, though yesterday’s figures indicate that the fillip from the government was slightly smaller than initially thought.
The housing tax credit helped house prices to
rise by 1.9 per cent in
the third quarter, though they remain 30 per cent down on their peak in 2006.
Paul Ashworth, US analyst with Capital Economics said: “The data still suggest that the economy exited recession some time around the middle of the year, albeit with a big helping hand from the various government stimulus measures. The positive contributions from consumption and residential investment were trimmed somewhat, suggesting that the cash for clunkers and mortgage tax credit had a slightly smaller impact on activity than we previously thought.” Capital expects the US economy to continue growing at the same pace in the fourth quarter but to slow down in 2010.