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U.S. third-quarter GDP beats expectations

25.12.2016

The latest data observed stronger consumer spending for services and more robust business investment in buildings and intellectual property.

The expenditure side breakdown of GDP showed that household spending increased for seven consecutive quarters.

GDP increased at a 3.5 per cent annual rate, the Commerce Department said in its third GDP estimate released on Thursday.

Consumer spending, which accounts for more than two-thirds of USA. economic activity, increased at a 3.0 per cent rate in the third quarter and not the 2.8 per cent pace reported last month. "The economy is going to end the year on a disappointing note, but we should see growth accelerate in the first half of 2017".

Looking forward, economists at MarketWatch expect growth to decelerate to a 2.4% rate in the fourth quarter.

The ONS also revised down growth for the second quarter to 0.6 percent, meaning there was no slowdown at all following June's Brexit vote - confounding predictions at the time that the "Leave" vote would push Britain's economy into recession.

The first estimates for GDP growth in 2016 will be published on January 27.

Consumer spending grew an unrevised 0.7 percent and business investment rose 0.4 percent, less than the 0.9 percent previously thought.

Separate figures for Britain's powerhouse services sector, which accounts for around 79% of the United Kingdom economy, saw output grow by 0.3% between September and October.

"The Chancellor set out in the Autumn Statement his plan to support a resilient economy that works for everyone by driving productivity and supporting working people, while maintaining fiscal discipline".

Another detail shows that the increase in corporate profits is actually less than was estimated. Investment spending rose by an identical 3.0%, led by a 12% jump in spending on structures, which reflects a resurgence in oil drilling as prices began to rise this summer.

The statistical office revised down its annual growth to 2.2% from 2.3% in the third quarter.

UK wages jumped by 4.5% to their highest level since 2013

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