US economy growing less than hoped

Tim Wallace
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US CONSUMER confidence is at its highest in six months, leading indicators point to growth into 2012 and new jobless claims last week were the lowest since 2008, according to a raft of upbeat data out yesterday.

But GDP growth for the third quarter was revised down by the Commerce Department, while industrial activity slowed last month according to the Chicago Fed, suggesting growth remains below trend.

The Chicago Fed activity index fell to minus 0.37 in November, indicating below trend growth, while GDP growth estimates in the third quarter were revised down to 1.8 per cent from two per cent.

Yet the University of Michigan’s consumer sentiment index rose to 69.9, up from 64.1 in November. Real spending is expected to increase by 1.8 per cent in 2012, it said, as long as action is taken on extending the payroll tax cut.

President Obama (pictured) yesterday appeared to be successful in his call to senators to end the crippling row over the tax.

Meanwhile initial jobless figures fell to 364,000, the lowest level since April 2008.