US business investment rises 16.3 per cent
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Friday 28 October 2011
The world's largest economy expanded strongly in the third quarter, as businesses invested and consumers hit the shops after a long period of caution.
US GDP in the three months to the end of September accelerated to an annualised rate of 2.5 per cent, after scraping just 0.4 per cent and 1.3 per cent in the first and second quarters, respectively. The brightest spot was a surge in business investment, which is running at a 16.3 per cent annualised rate, which suggests that corporate managers are finally optimistic enough to spend after a long period of caution – or that they can put off vital investment no longer. The 16.3 per cent figure was up from 10.3 per cent in the second quarter.
The GDP figures added to the buoyancy of financial markets. Some economists were more circumspect.
Katy Bostjancic of the Conference Board, which measures consumer confidence, believes the figures show "an unsustainable spurt". She said: "Continued woes in the housing market are overshadowed by consumer concern over the anaemic labour market, as highlighted by the decline in consumer sentiment back to 2008 levels. Weak sentiment could limit the rise in consumption through the holiday season."
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