Sturdy US Economy Resists Storms

02 December 2005

The US economy grew by a robust 4.3% in the last quarter, proving its resilience to hurricanes and gasoline price hikes.

The Commerce Department says the Q3 figure for gross domestic product was higher than economists had forecast and higher than the 3.8% initially estimated by the government.

Comments Mike Englund, chief economist at Action Economics: "The economy is booming. As much as people may have been concerned about gas prices, consumers took the hit and now gas prices are falling."

Consumer spending, which accounts for around 70% of the economy, grew at a 4.2%, stronger than the initial estimate of 3.9% and the fastest pace since the final quarter of 2004.

Businesses boosted spending on equipment and software at a 10.8% rate in Q3. That was better than the 8.9% rate first estimated for the period and close to the 10.9% growth rate in Q2.

When food and energy prices are excluded, core inflation rose at a rate of 1.2%, less than first estimated and down from a 1.7% pace in Q2.

Data sourced from New York Times; additional content by WARC staff