ECONOMISTS had expected 3% GDP growth but 2.8% was still seen as a relief because it indicated that the US may not dip into a recession
Mumbai : After being stuck in the doldrums for major part of last year, the US economy finally gathering steam at the fag end of last season. The economy grew at its fastest pace in more than a year and a half in the fourth quarter of 2011.
U. S. gross domestic product expanded annually by 2.8 %, the Commerce Department said on Friday, the quickest pace since the second quarter of 2010. That was up from 1.8 % growth in Q3 and 1.3 % in Q2.
Analysts wondered whether the bounce back in the fourth quarter is just another blip and whether the recovery stands on strong legs. Some argue that the recovery is not sustainable as Europes debt crisis has worsened and threatens US exports.
” The increase in real GDP in 2011 primarily reflected positive contributions from personal consumption expenditures ( PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
Consumer spending rose 2.0%, compared to 1.7% in the third quarter.
The strong data comes days after jobless rate in December fell to its lowest level since February 2009. The US economy gained 200,000 net new jobs in December, bringing the unemployment rate down a tenth of a % age point to 8.5 %, its lowest level since February 2009, the Labor Department said last week.
The final quarter of 2011 got a big lift from businesses increasing their stockpile of goods, but a buildup of inventory at years end is likely to hold down growth this quarter.
The World Bank has warned that a recession in Europe will slow global economic growth. According to the bank, the US economy would grow 2.2 % in 2012 and 2.4 % in 2013. On Thursday, the US Federal Reserve said it plans to keep key interest rates exceptionally low at least through 2014.