29 October 2010, 18:14  US: 3Q GDP +2% yr/yr

The US economy grew at an annual rate of 2% in the third quarter this year, matching most economists' expectations, according to official figures from the US Commerce Department. The US showed more signs of life in the July-September period, after slowing to an annual rate of 1.7% in the second quarter from 3.7% in the first. The figures probably will not dissuade Federal Reserve from announcing a second round of bond purchases next week to push interest rates down further and energise the recovery. Analysts expect the Fed to announce bond purchases of at least $100 billion a month to push borrowing costs lower and spur businesses to expand investment and hiring. The economy is experiencing a slow recovery by historical standards, with unemployment at 9.6% and Americans increasingly nervous about the future. That is expected to shift the country's political landscape in Tuesday's congressional elections, seen as a vote on President Barack Obama's performance on the economy. His Democratic party is expected to suffer big losses. The U.S. central bank cut overnight interest rates to near zero in December 2008 and has bought about $1.7 trillion worth of Treasury and mortgage-related debt since then.

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