The US economy expanded at an annualised 1.9% pace in the second quarter of the year, marking an improvement from the previous quarter, a government report shows today.
US economic momentum picked up from a revised 0.9% rate for the first three months of the year, but second-quarter growth fell short of the 2.3% forecast by most economists.
Analysts said a giant economic stimulus, worth around $168 billion, had helped boost growth, but the Commerce Department report showed that a surge in exports had also helped fire up growth during the second quarter.
The survey on the health of America's $14 trillion economy showed that second-quarter growth was the strongest since the third quarter of last year.
The government revised down growth for the 2008 first quarter and the last quarter of 2007. Fourth-quarter growth was revised significantly lower to show a drop of 0.2% from a prior estimate showing a gain of 0.6%. The decline in gross domestic product (GDP) during the fourth quarter marked the first time US economic growth slipped into negative territory since the recession of 2001.
A recession is typically marked by two straight quarters of negative economic growth. Some economists and stock market investors believe the world's largest economy has slipped into a recession, but the second-quarter growth figure will reassure those analysts who believe the economy will avoid a recession.
Economic growth has slowed of late amid a lengthy housing market slump and as a credit crunch grips the banking industry. Soaring world oil prices have also dented economic momentum.
Consumer spending rose 1.5% during the quarter against a 0.9% gain in the prior quarter despite Americans cutting back on their purchases of big-ticket durable goods, including cars and kitchen appliances.
