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US economic growth at 1.7% in second quarter | US economic growth at 1.7% in second quarter |
(35 minutes later) | |
The US economy grew at an annualised pace of 1.7% in the second quarter of the year, the Commerce Department has said. | The US economy grew at an annualised pace of 1.7% in the second quarter of the year, the Commerce Department has said. |
That was a faster pace than expected by economists. | That was a faster pace than expected by economists. |
It was also up from the growth rate for the first three months of 2013, which was revised lower to 1.1% from 1.8%. | It was also up from the growth rate for the first three months of 2013, which was revised lower to 1.1% from 1.8%. |
A slowdown was widely expected due to the impact of federal spending cuts, but also from the continuing weakness in the global economy. | A slowdown was widely expected due to the impact of federal spending cuts, but also from the continuing weakness in the global economy. |
In March, $85bn (£56bn) of public spending was cut as a result of a deal between Democrat and Republican politicians. | In March, $85bn (£56bn) of public spending was cut as a result of a deal between Democrat and Republican politicians. |
But the Commerce Department said that the federal government cut spending by only 1.5% in the April-to-June period, compared with a sharp drop of 8.4% in the first quarter. | But the Commerce Department said that the federal government cut spending by only 1.5% in the April-to-June period, compared with a sharp drop of 8.4% in the first quarter. |
The US economy grew by 0.4% in the second quarter compared with the previous three months. That compares to 0.6% growth in the UK in the same period. | The US economy grew by 0.4% in the second quarter compared with the previous three months. That compares to 0.6% growth in the UK in the same period. |
The eurozone's GDP figures are released on 14 August. The 18-member region shrank 0.2% in the first quarter - the sixth quarter of decline in a row. | The eurozone's GDP figures are released on 14 August. The 18-member region shrank 0.2% in the first quarter - the sixth quarter of decline in a row. |
'Recovery' | |
"We have an upside surprise in the GDP, which speaks volumes for the job recovery that we're putting together," said Andre Bakhos, a market analyst at Lek Securities in New York. | |
"The recovery in the economy is starting to take root. This will be an interesting development given the fact that we'll have a Fed announcement today." | |
The Federal Reserve meets on Wednesday to make its latest statement on its massive bond-buying programme to stimulate the economy. | |
Consumer spending accounts for about 70% of US GDP. Official figures showed that consumers spent less in the second quarter than in the first, with personal consumption expenditure up 1.8%, compared with 2.3% previously. | Consumer spending accounts for about 70% of US GDP. Official figures showed that consumers spent less in the second quarter than in the first, with personal consumption expenditure up 1.8%, compared with 2.3% previously. |
Revisions | |
As well as the last set of quarterly figures, the Commerce Department also revised growth figures going back several decades. | As well as the last set of quarterly figures, the Commerce Department also revised growth figures going back several decades. |
It said the US economy now grew by 2.8% in 2012, up from its previous estimate of 2.2%. This may help to explain why growth appeared weak last year but hiring continued to improve. | It said the US economy now grew by 2.8% in 2012, up from its previous estimate of 2.2%. This may help to explain why growth appeared weak last year but hiring continued to improve. |
The government also said that the economy contracted by 4.3% during the recession, which lasted from December 2007 to June 2009, better than the previous estimate of a 4.7% drop. | The government also said that the economy contracted by 4.3% during the recession, which lasted from December 2007 to June 2009, better than the previous estimate of a 4.7% drop. |
The economy expanded by 8.2% from the middle of 2009 through to the end of last year, which was more than the 7.6% previously suggested. | The economy expanded by 8.2% from the middle of 2009 through to the end of last year, which was more than the 7.6% previously suggested. |
The latest figures showed a pick up in both imports and exports. Exports rose 5.4% in the second quarter, compared with a drop of 1.3% in the first quarter. Imports jumped 9.5%, compared with an increase of 0.6% in the previous quarter. | The latest figures showed a pick up in both imports and exports. Exports rose 5.4% in the second quarter, compared with a drop of 1.3% in the first quarter. Imports jumped 9.5%, compared with an increase of 0.6% in the previous quarter. |