MOSCOW, October 31 (RIA Novosti) — US growth exceeded forecasts in the third quarter, falling in line with the Fed’s desire to quit quantitative easing (QE) measures, and also marking the best six months performance since 2003, proving that the US post-recession monetary policy has been successful.
The US economy has demonstrated a solid growth of 3.5% year-on-year in the July-September quarter, which is one of the best results among developed nations, AP reports. Forecasts are also rosy, as the US economy is only gaining momentum for future expansion.
Figures published by the US Department of Commerce show that growth in the 3rd quarter slowed to 3.5% after an even faster expansion of 4.6% in the 2nd quarter. The US trade deficit in decreasing, Bloomberg notes, which also contributed to growth. Among other factors are increased consumer spending, a decrease in fuel prices and improvements in the job market with a 0.2% decline in unemployment in September and 248,000 new jobs created that same month, according to Bureau of Labor Statistics.
“This is the strongest six-month interval we’ve had in 10 years,” said Carl Tannenbaum of the Northern Trust Company, as quoted by the New York Times. “The pace of the expansion has clearly increased.”
Many experts assume that the economy will advance further at a similar scale, which will help create new jobs. “I don’t think it’s going to be hard to maintain a growth of 3 percent for the fourth quarter,” Mr. Tannenbaum said.
The growth “is on a firm footing, and if the labor market continues to get better, that’s the primary support to consumer spending,” Brian Jones of the Societe Generale New York branch said, as quoted by Bloomberg. “The demand … was very healthy in the third quarter,” he added.
However, the US economy is still far from prosperity. Consumer spending, despite being strong, is only 1.8%, which is less than the previously forecasted 1.9%, Bloomberg says. Moreover, sales in the housing sector shrank to 1.8% from a 8.8% rise in the 2nd quarter.
Skeptics also say that growth in 2014 is likely to fall short of the government-projected 3% due to a 2.1% GDP decrease in the 1st quarter. Consequently, Doug Handler of HIS notes, as quoted by the New York Times, yearly growth will not exceed 2.2%. Federal Reserve head Janet Yellen also recently voiced concerns regarding a decrease in the number of newly established businesses, which may undermine the creation of new jobs.