US Q3 GDP revised downward to 2%, slower than first thought

22 November 2011 14:20  [Source: ICIS news]

WASHINGTON (ICIS)--The US Commerce Department on Tuesday revised downward the nation’s third quarter gross domestic product (GDP) growth, saying the economy grew at only 2% rather than the 2.5% GDP expansion estimated in late October.

This second estimate of US GDP performance in the third quarter was based on more complete source data than were available, the department said, when the first estimate was issued on 27 October.

At 2%, the third quarter’s economic performance was still better than the 1.3% GDP advance recorded in the second quarter and marks a reassuring improvement compared with the first quarter’s barely positive 0.4% GDP gain.

However, the third quarter’s downward revision from 2.5% to 2% indicates that the US economy is still struggling to reach normal growth or trend rates of 3% to 3.5%.

In addition, 2% growth is not expected to make any headway in reducing the nation’s 9% unemployment rate.

To make any substantial inroads on the jobless figures, the US economy would have to grow at 3.5% and above for an extended period.

The department will issue its third and final estimate of the nation’s third quarter GDP performance on 22 December.

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