Thursday, December 21, 2006

Forex News: 21.12.2006 GDP revised down to 2% in third quarter

The U.S. economy grew at a 2% real seasonally adjusted annual rate in the third quarter, slightly lower than the 2.2% estimated a month ago.

It was the slowest growth since the fourth quarter of 2005, when hurricane damages slowed the economy to 1.8%. The economy grew at a 2.6% pace in the second quarter.

As before, the collapse of homebuilding was a large drag on growth, offset by healthy consumer spending and robust capital spending by businesses.

Core consumer prices were unrevised in the report, showing a 2.2% annualized gain, still in the Federal Reserve's discomfort zone. Overall inflation in the economy was revised slightly higher on newer data on government purchase prices.

Economists were looking for growth in the July-to-September period to remain at 2.2% in the final revision. Economists are predicting 2% annualized growth both in the current quarter and in the first quarter of 2007.


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