Mood across the pond lifted by upwardly revised growth data

 
City A.M. Reporter
THE US economy grew faster than previously estimated in the third quarter of the year, official data showed yesterday.

America’s GDP expanded at a 3.1 per cent annual rate in the three months to September, the Commerce Department said, a step up from the 2.7 per cent pace it reported last month.

Exports and government spending provided a lift to the data.

But the boost is likely to be lost amid slowing global demand and a move towards tighter fiscal policy in Washington DC.

Separate data released yesterday showed factory activity in the mid-Atlantic region picked up this month, while home resales in November were the best in three years. However, a rise in first-time applications for unemployment aid last week suggested job growth remained modest.

The Labor Department said initial claims for jobless benefits increased 17,000 to a seasonally adjusted 361,000, in the low end of the range they held before superstorm Sandy struck in late October.

The data covered the survey period for the government’s report on December nonfarm payrolls and suggested modest job gains.

“The pace of hiring is still disappointing,” said Tanweer Akram, a senior economist at ING Investment Management in Atlanta, adding that the pace of GDP growth in the current quarter “remains quite soft.”

Separately, the National Association of Realtors said existing home sales surged 5.9 per cent in November to a seasonally adjusted annual rate of 5.04m units. The number was the highest recorded since November 2009.