News / Economy

US Economy Growing Faster Than First Thought

US Economic Growth in Second Quarter Beats Expectationsi
X
August 30, 2013 12:10 AM
The U.S. economy grew at a faster pace in the second quarter than first thought. The Commerce Department says the country’s gross domestic output increased at an annual rate of 2.5 percent from April to June - a marked improvement from the initial estimate of 1.7 percent. Analysts say the latest figure suggests the U.S. recovery is gaining momentum. Mil Arcega has more for VOA.
Related report by Mil Arcega - US Economic Growth in Second Quarter Beats Expectations
Ken Bredemeier
The U.S. economy is growing faster than first estimated.

A report Thursday from the Commerce Department says the country's economic output increased at a 2.5 percent annual rate between April and June. That is faster than earlier estimates and more than double the 1.1 percent growth rate in the first quarter.

The chief U.S. economist at High Frequency Economics, Jim O'Sullivan, told VOA that while the 2.5 percent growth is not a "booming number," recently some analysts expected almost no improvement in the economy.

"If you go back a month or so ago, people were worried that [second quarter] number could be close to zero. I think in general, expectations over the last few months have been too low, and I think we're increasingly getting evidence that the economy is recovering," said O'Sullivan.

The Commerce Department said the economy gained momentum on the strength of exports that were larger than previously estimated, while the increase in imports was less than first calculated.

The government also said that personal consumption spending was up. That is a key consideration, since consumer spending accounts for about 70 percent of the American economy, the world's largest. Increased consumer spending helped offset cuts in government expenditures throughout the country.

In another report, the government said that initial claims for jobless benefits fell last week, a sign the country's labor market is continuing to improve, with businesses laying off fewer workers. The U.S. said 331,000 people sought unemployment compensation, down 6,000 from the week before.

The country's central bank, the Federal Reserve, is closely watching economic trends as its weighs whether to start cutting its $85-billion-a-month purchase of securities to boost the country's recovery from the depths of the recession several years ago. The Fed has said it could start to pare back its stimulus measures in the coming months if the economy continues to improve, although the national unemployment rate remains high at 7.4 percent.

O'Sullivan predicted that with the improving economy, the Fed is likely to starting trimming its asset purchases.

“All signs at this point suggest that they will start tapering and start winding down the purchase program. Of course, right now they’re buying $85 billion per month in securities, so they’ll start pulling that number down, probably not by a huge amount. I’m guessing they’ll clip it maybe to $75 billion a month from $85 billion."

Federal Reserve policy makers are set to meet again in mid-September.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Religion Aside, Christmas Gains Popularity in Communist Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.