By Nick Mann | 22 November 2011
Growth in the US economy during the third quarter of the year was less than previously estimated, according to latest figures from the US government.
The Department of Commerce today downgraded its gross domestic product estimate for the three months to the end of September from 2.5% to 2%. The revised estimate came as a result of the department having previously overestimated the amount spent by firms on new stock and factories.
However, the figures still represent a continuing upward trend in the country’s economic growth so far in 2011 – up from 1.3% in the second quarter and 0.4% in the first three months of 2011.
The Department of Commerce attributed this improvement to ‘positive contributions’ from consumer spending (Personal Consumer Expenditure), investments in new factories (non-residential fixed investment), exports and federal government spending.
‘The acceleration in real GDP in the third quarter primarily reflected accelerations in PCE and in non-residential fixed investment, a smaller decrease in state and local government spending, a deceleration in imports, and an acceleration in exports that were partly offset by a larger decrease in private inventory investment,’ it explained.
The figures were published just hours after a congressional committee charged with cutting US government spending by $1.5 trillion (£958bn) over the next ten years yesterday failed to agree on how the cuts should be made.
The co-chairs of the cross-party joint select committee on deficit reduction, Representative Jeb Hensarling and Senator Patty Murray, said: ‘After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.
‘Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve.
‘We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American.’
The committee was formed following a deal in Congress between Republicans and Democrats, which meant the US narrowly avoided defaulting on repayments on its $14tn (£9tn) debt.
However, as a result of yesterday’s failure to agree on a deficit reduction plan, $1tn (£639bn) of public spending cuts to be made over the next ten years will now automatically take effect in 2013.
US President Barack Obama yesterday warned Congress against any attempt to halt the process of these measures.
‘I will veto any effort to get rid of those automatic spending cuts to domestic and defence spending,’ he said. ‘There will be no easy off-ramps on this one.’
Growth in the US economy during the third quarter of the year was less than previously estimated, according to latest figures from the US government.
The Department of Commerce today downgraded its gross domestic product estimate for the three months to the end of September from 2.5% to 2%. The revised estimate came as a result of the department having previously overestimated the amount spent by firms on new stock and factories.
However, the figures still represent a continuing upward trend in the country’s economic growth so far in 2011 – up from 1.3% in the second quarter and 0.4% in the first three months of 2011.
The Department of Commerce attributed this improvement to ‘positive contributions’ from consumer spending (Personal Consumer Expenditure), investments in new factories (non-residential fixed investment), exports and federal government spending.
‘The acceleration in real GDP in the third quarter primarily reflected accelerations in PCE and in non-residential fixed investment, a smaller decrease in state and local government spending, a deceleration in imports, and an acceleration in exports that were partly offset by a larger decrease in private inventory investment,’ it explained.
The figures were published just hours after a congressional committee charged with cutting US government spending by $1.5 trillion (£958bn) over the next ten years yesterday failed to agree on how the cuts should be made.
The co-chairs of the cross-party joint select committee on deficit reduction, Representative Jeb Hensarling and Senator Patty Murray, said: ‘After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.
‘Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve.
‘We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American.’
The committee was formed following a deal in Congress between Republicans and Democrats, which meant the US narrowly avoided defaulting on repayments on its $14tn (£9tn) debt.
However, as a result of yesterday’s failure to agree on a deficit reduction plan, $1tn (£639bn) of public spending cuts to be made over the next ten years will now automatically take effect in 2013.
US President Barack Obama yesterday warned Congress against any attempt to halt the process of these measures.
‘I will veto any effort to get rid of those automatic spending cuts to domestic and defence spending,’ he said. ‘There will be no easy off-ramps on this one.’
