US economy grew 2% in third quarter | business | Hindustan Times
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US economy grew 2% in third quarter

business Updated: Oct 29, 2010 19:50 IST

The US economy grew two percent in the third quarter, the Commerce Department said Friday, boosted by a rise in consumer spending.

The world's largest economy showed more signs of life in the July-September period, after slowing to an annual rate of 1.7 percent in the second quarter from 3.7 percent in the first.

"The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures," a statement said.

With nearly one in 10 workers without jobs, consumers have tended to keep their wallets shut, creating a vicious circle for the spending that accounts for 70 percent of US gross domestic product. That trend showed signs of easing, as spending increased 2.6 percent in the third quarter, compared with an increase of 2.2 percent in the second.

The positive trend was pared back by a 17-percent increase in imports, which directly reduce GDP as cash flows out of the economy.

Although the US economy has grown in each of the past four quarters, growth has not been strong enough to bring down high unemployment, stuck for the past two months at 9.6 percent. The growth estimate is subject to revision.