Sat, Sep 27, 2014 - Page 14 News List

Spring bloom for US economy after winter decline

AP, WASHINGTON

After a dismal winter, the US economy expanded at an annual rate of 4.6 percent in the spring, the fastest pace in more than two years, the government reported yesterday.

The US Commerce Department said the April-June figure followed a decline of 2.1 percent in the first three months of the year, when a harsh winter caused the biggest drop in activity since the Great Recession.

Friday’s result was even better than the 4.2 percent estimate made a month ago.

The latest upward revision in GDP reflected newfound strength in business investment, which grew at an annual rate of 9.7 percent in the second quarter. The result is better than the US government’s previous estimate of 8.1 percent, bolstered by both investment in structures and equipment.

The revision showed that export sales grew at an 11.1 percent rate in the second quarter, stronger than a previous 10.1 percent estimate, another factor helping to boost growth.

Consumer spending, which accounts for more than two-thirds of economic activity, grew at a 2.5 percent annual rate, unchanged from the previous estimate, but double the 1.2 percent growth in consumer spending in the first quarter.

Economists now expect much less volatility in growth going forward. Many say the US economy will grow at an annual rate of 3 percent or better in both the current July-September quarter and in the final quarter this year.

However, because of the rough start to the year, growth for all of this year is expected to be a lackluster 2.1 percent, little changed from last year’s 2.2 percent GDP increase, they added.

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