Saturday, 27 October 2012

US growth accelerates in third quarter as euro area reports mixed data

The US economy performed better than expected in the third quarter.

An advance estimate by the Commerce Department released on Friday showed that the economy grew at a 2 percent annual rate after having grown 1.3 percent in the second quarter. Economists surveyed by Bloomberg had estimated a growth rate of 1.8 percent for the third quarter.

In another piece of good news for the US economy on Friday, the Thomson Reuters/University of Michigan final consumer sentiment index for October came in at 82.6, the highest since September 2007, and up from 78.3 in September.

German consumer confidence is also improving. GfK said on Friday that its consumer confidence index for Germany will rise to 6.3 in November, the highest in five years, from 6.1 in October.

Other eurozone economic data on Friday were mixed though.

French consumer confidence deteriorated in October, INSEE's consumer confidence index falling to 84 from 85 in September.

In Italy, Istat's composite business confidence climate index increased to 76.6 from 76.0 in September.

But in Spain, the unemployment rate hit a record high of 25 percent in the third quarter amid a series of spending cuts by the government.

In contrast, Japan is providing a fresh round of fiscal stimulus. The government on Friday approved a US$5.3 billion cash injection to boost the economy.

The stimulus comes as a report on Friday showed that Japan's core consumer prices fell 0.1 percent from a year ago in September.

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