Surprise Surge in US Economy as Businesses Up Spend

31 October 2003

A business spending bonanza has helped the US economy to its biggest quarterly growth for nearly twenty years.

According to the Commerce Department, stateside GDP soared at an annualised rate of 7.2% in the third quarter – far higher than economists' forecasts and the largest quarterly rise since Q1 1984.

Such rapid expansion – more than double the growth rate of Q2 – was driven by an 11.1% surge in business investment, the fastest rate since 2000. Consumer spending also rocketed, leaping 6.6% in Q3 as tax cuts helped Americans unzip their wallets

Nevertheless, analysts warned there could still be trouble ahead if the employment market does not pick up.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff