Accessibility links

Breaking News

US Economy Grew at 3.9 Percent Annual Rate in Third Quarter


New figures show the U.S. economy grew at a fairly brisk pace during the third quarter of 2007. VOA White House Correspondent Paula Wolfson reports Bush administration officials give much of the credit to rising American exports.

The Commerce Department says the gross domestic product, the value of all goods and services produced within the United States, grew at a 3.9 percent annual rate in the third quarter.

The figures for July, August and September exceeded some expectations and were slightly stronger than the growth rate (3.8 percent) recorded for the second quarter of the year.

The gross domestic product is seen as the best gauge of the nation's economic health, and Commerce Secretary Carlos Gutierrez says the latest GDP figures are encouraging.

"Once again, we see how diverse and how resilient our economy is," he said.

The increase in economic growth came amidst a decline in the U.S. housing market and accompanying concerns about the availability of credit. Edward Lazear - the president's chief economic advisor - says that speaks to the underlying strength of the U.S. economy.

"One of the big concerns we had was that the decline in the housing market would affect other parts of the economy, in particular, consumption," he added. "We have not seen any evidence of that."

While an increase in consumption - or consumer spending - is given much of the credit for third quarter economic growth, Commerce Secretary Gutierrez says an equal or perhaps greater factor is the continuing rise in U.S. exports.

"Exports generated 45 percent of this quarter's GDP growth. Last year we had a record $1.4 trillion in exports - that is up 12.7 percent (over 2005). If we continue on our current path of opening up overseas markets and expanding exports this year should be even better with a very strong growth rate."

During a session with White House reporters, members of President Bush's economic team took issue with the notion that the weakening U.S. dollar has led to the export increase. Edward Lazear said as foreign economies strengthen, demand for American goods and services builds.

"This is not a zero-sum game. We do well when our trading partners do well," he explained. "So our exports increase when other economies grow, because when other economies grow, that means their demand for all goods - some of which are domestic to them but some of which come from us - also grow. And so a significant fraction of the export growth we have seen has been a result of growing economies around the world and that is a good sign."

The commerce department figures came out on a day when oil prices soared to a new record high on world markets. Bush administration officials say rising energy costs figured into the latest GDP statistics, and note that without the increase in oil prices the third quarter growth in the U.S. economy would have been even stronger.