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US Economy Grew 3.2 Percent in 4th Quarter

The US Commerce Department says the economy grew at a faster pace in the last three months of 2010, expanding at an annual rate of 3.2 percent. Experts say it's another sign that the worst of the economic crisis is over. But as Mil Arcega reports, the US economy is still not growing fast enough to bring down unemployment.

The US economy picked up speed in the final months of 2010, fueled by a surge in exports and the strongest consumer spending in four years.

Economists say the gains should help alleviate concerns about the threat of another recession.

Kevin Flanagan, a financial analyst at Morgan Stanley, said "I think we have changed the conversation now to a more sustainable recovery and hopefully one now that moves into expansion."

Consumer spending, which accounts for about 70 percent of the US economy, grew four-and-a-half percent in the fourth quarter, while sales of US made goods to foreign buyers rose ten percent.

Treasury Secretary Timothy Geithner says the numbers suggest improving confidence in the U S recovery.

But he admits the economy needs to grow faster to reduce the nation's high unemployment. "You know, it's not a boom. It's not an expansion that's going to offer the possibility of a rapid decline in the unemployment rate. But I think there's much more confidence now that it's sustainable, much more confidence that we're able to avoid the risk of slipping back into recession," he said.

Overall, the U.S. economy grew almost three percent last year - a sharp improvement over 2009 when the economy shrank more than two percent.

Despite the gains, the initial GDP numbers came in slightly below market expectations of three-and-a-half percent.

The Dow Jones Industrial average plunged more than 150 points at Friday's close, but analysts blame much of the decline on higher oil prices and worries about unrest in the Middle East.