US economy exceeds expectations as growth jumps
THE US economy continued its recovery yesterday, as data revealed it grew more than forecast between April and June, and added more jobs in July than had been expected.
Data from the US Office of National Statistics showed GDP jumped 1.7pc in the second quarter of the year. That was much more than the 1pc growth markets had been expecting.
Job gains and rising home prices are shoring up Americans' confidence and lifting automobile sales and production, making it likely the US will pick up once government spending cuts and tax increases pose less of a restraint.
Consumer spending, the biggest part of the statistics, rose 2.3pc.
"Everything looks and feels better. We should see a generally better second half than first half, and a stronger second half this year than last year," said Stuart Hoffman, chief economist at PNC in Pittsburgh.
The GDP figures came as data from New Jersey-based ADP Research showed US firms added 200,000 workers to payrolls last month – 20,000 more than had been forecast.
The figures were expected to give US Federal Reserve chairman Ben Bernanke more room to pull back on the Fed's economic stimulus plans. (Additional reporting by Bloomberg)