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U.S. economy expands 2% in 3Q

10-30-2010 13:41 BJT

WASHINGTON, Oct. 29 (Xinhua) -- The U.S. economy grew at an annual pace of 2 percent in the third quarter this year, as personal consumption picked up but the nation's real estate sector remains lackluster, fresh evidence of the slow economic recovery.

"The increase in real gross domestic product (GDP) in the third quarter primarily reflected positive contributions from personal consumption expenditure, private inventory investment, nonresidential fixed investment, federal government spending, and exports that were partly offset by a negative contribution from residential fixed investment," the U.S. Department of Commerce said in a report Friday.

Real GDP, the output of goods and services produced by labor and property located in the United States, rose 3.7 percent in the first quarter. U.S. economic growth was revised upward to an annual rate of 1.7 percent in the second quarter of this year, compared with the initially estimated pace of 1.6 percent.

"The small acceleration in real GDP in the third quarter primarily reflected a sharp deceleration in imports and accelerations in private inventory investment and in personal consumption expenditure that were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and in exports," the report said.

Friday's figures showed that real personal consumption expenditures gained 2.6 percent in the third quarter, compared with an increase of 2.2 percent in the second.

Consumption accounted for around 70 percent of the total economic activity in the world's largest economy.

The change in real private inventories added 1.44 percentage points to the third-quarter change in real GDP after adding 0.82 percentage point to the second-quarter change. The change in real private inventories added 1.44 percentage points after adding 0.82 percentage point to the second-quarter change and final sales of computers added 0.25 percentage point after adding 0.03 percentage point in the second quarter.

Current-dollar personal income rose 65.7 billion U.S. dollars, or 2.1 percent, in the third quarter, compared with an increase of 123.5 billion dollars in the second.

The personal saving rate -- saving as a percentage of disposable personal income -- was 5.5 percent in the third quarter, compared with 5.9 percent in the second quarter.

The International Monetary Fund predicted earlier this month that the U.S. economy would grow at an annual pace of 2.6 percent in 2010 and 2.3 percent in 2011, respectively.

But economists say the U.S. economy's sluggish recovery pace will continue and the growth is not robust enough to reduce the stubbornly high unemployment rate, currently at 9.6 percent.

Editor:Yang Jie |Source: Xinhua

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