Friday, October 30, 2009

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Recession over? GDP grows 3.5%

The U.S. economy grew more than expected in the third quarter, according to the government's initial report on gross domestic product.

The Commerce Department says GDP grew at an annual rate of 3.5 percent last quarter, the first positive quarterly growth in a year, and the largest quarterly advance since the third quarter of 2007.

GDP contracted by 0.7 percent in the second quarter.

Third quarter growth was led by double digit gains in durable goods and residential real estate, categories propped up by government stimulus programs like the first time home buyer credit and the cash for clunkers program. While that raises questions about the sustainability of growth as stimulus programs unwind, the Obama administration did not hesitate to take the credit.

"Today's numbers indicate that the tough decisions this administration made to rescue the economy from the abyss were correct," said Commerce Secretary Gary Locke in a statement. "We're headed in the right direction, and even though there are still too many Americans out of work and still much work to be done, without the action taken in the early days of this administration, the pain families are feeling today would be much worse."

The Labor Department reported Thursday that first time jobless claims totaled 530,000 last week, although the total number of Americans currently receiving unemployment benefits fell 148,000 to 5.8 million, the biggest one week decline since July.

The official declaration of the beginning and end of a recession has traditionally been given to the National Bureau of Economic Research, which has not raced to make any such declaration. Its Web site continues to mark the endpoint of the current recession with a question mark.

1 comments:

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