Doldrums Ahead for US Economy

01 December 2006

WASHINGTON DC: The US Commerce Department reports that the nation's economy delivered an annual growth rate of 2.2% in the July-September quarter.

The updated reading is a substantial improvement on the government's earlier estimate of 1.6% growth, which would have been the worst showing in more than three years.

The improvement, however, did not conceal the fact that the US economy lost momentum through 2006.

During the first quarter GDP grew at 5.6%, the best performance in two and a half years. From April through June, the growth rate was 2.6% as consumer spending tightened in response to surging energy prices.

The further slowdown in late summer mostly reflected the deepening housing slump.

But on an encouraging note, a Federal Reserve survey found most parts of the country enjoyed moderate economic growth in the late fall despite troubles in the housing market and the automotive industry.

Data sourced from People