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US GDP rebounds with 3.3% growth | US GDP rebounds with 3.3% growth |
(10 minutes later) | |
The US economy grew at a revised 3.3% annually in the second quarter of 2008, the Commerce Department said, much higher than its first estimate of 1.9%. | The US economy grew at a revised 3.3% annually in the second quarter of 2008, the Commerce Department said, much higher than its first estimate of 1.9%. |
The rebound was linked to strong US exports, helped by the weak dollar, while government tax rebates also boosted consumer spending. | The rebound was linked to strong US exports, helped by the weak dollar, while government tax rebates also boosted consumer spending. |
GDP grew at a rate of 0.9% in the first quarter, after a 0.2% contraction in the last three months of 2007. | GDP grew at a rate of 0.9% in the first quarter, after a 0.2% contraction in the last three months of 2007. |
The Federal Reserve has warned the economy will remain weak this year. | The Federal Reserve has warned the economy will remain weak this year. |
"While we're not out of the woods yet, maybe we're beginning to see some sunlight," said John Wilson, equity strategist at Morgan Keegan. | "While we're not out of the woods yet, maybe we're beginning to see some sunlight," said John Wilson, equity strategist at Morgan Keegan. |
"At some point, the market will begin to look through the trough and gauge the strength of the coming upturn." | "At some point, the market will begin to look through the trough and gauge the strength of the coming upturn." |
'No recession' | 'No recession' |
The data showed that exports grew at an annualised rate of 13.2%, higher than the government's initial estimate of 9.2%. | The data showed that exports grew at an annualised rate of 13.2%, higher than the government's initial estimate of 9.2%. |
Imports fell at a rate of 7.6% as the US economic slowdown reduced demands for goods made overseas. | Imports fell at a rate of 7.6% as the US economic slowdown reduced demands for goods made overseas. |
The improved trade balance added 3.1 percentage points to second-quarter GDP, the biggest since 1980. | The improved trade balance added 3.1 percentage points to second-quarter GDP, the biggest since 1980. |
The slowdown in the housing market was evident, as builders cut back and businesses reduced their spending. | The slowdown in the housing market was evident, as builders cut back and businesses reduced their spending. |
Consumer spending, boosted by the government's $600 tax rebate payments, rose by 1.7%, slightly higher than the previous quarter's 1.5%. | Consumer spending, boosted by the government's $600 tax rebate payments, rose by 1.7%, slightly higher than the previous quarter's 1.5%. |
Some observers said that the figures lent support to the argument that the US was not heading for a recession. | Some observers said that the figures lent support to the argument that the US was not heading for a recession. |
"For a recession the economy is certainly growing very quickly," said Avery Shenfeld, senior economist at CIBC World Markets. | "For a recession the economy is certainly growing very quickly," said Avery Shenfeld, senior economist at CIBC World Markets. |
"A lot of that growth is driven off exports and pessimists might say that can't continue during slowing growth overseas. | "A lot of that growth is driven off exports and pessimists might say that can't continue during slowing growth overseas. |
"But I would say this happened precisely during the period of slowing growth overseas ... this is still an economy that faces slow times but not a recession." | "But I would say this happened precisely during the period of slowing growth overseas ... this is still an economy that faces slow times but not a recession." |
16-year low | |
However recent data on the US housing market suggests a grim outlook for the sector. | |
US house prices were down a record 15.4% in the April to June quarter compared with a year ago, according to a closely-watched report released earlier this week. | |
The decline was recorded by the latest S&P/Case-Shiller survey of US national home prices. | |
The report said the fact that the falls were nationwide was the latest sign the US housing downturn is continuing. | |
Separate government data said sales of new homes were at an annual rate of 515,000 units in July, up slightly from June, but still near a 16-year low, and half the rate of new home sales one year ago. |