WASHINGTON - The Commerce Department says U.S. economic growth in the April to June quarter showed a robust 3.3 percent annual rate of advance in gross domestic product. The surprising upward revision was well received by financial markets.
The more than three percent growth rate was nearly double what most economists had been expecting. Wall Street rallied on the news, sending stock prices sharply higher.
In its initial report last month, the Commerce Department reported 1.9 percent growth. President Bush’s chief economic advisor, Ed Lazear, credits the bi-partisan fiscal stimulus package for much of the advance.
“The American economy seems to be much more resilient than many forecasters had given it credit for,” said Lazear. “And, the other thing we take from this is that trade is very important and that the stimulus package was well-timed and seems to be working.”
Speaking on Bloomberg Television, Lazear said he believes the effects of the $150 billion stimulus package are continuing into the current July to September quarter. The fiscal stimulus, supported by both political parties to revive a slowing economy, gave from $300-$600 to most American taxpayers.
The U.S. economy has been hard hit this year by soaring fuel and food prices and declining prices for homes, the principal asset of most American families. Fuel prices have come down in recent weeks, but they are still up more than 50 percent over the past year.
Economists continue to worry that the economy could slip into recession, defined as a period of outright decline.
Even with the latest Gross Domestic Product revision, the consensus forecast for growth this year is for little more than one percent. The third and fourth quarters of the year are expected to be more sluggish than the previous six months.
Last year the U.S. economy expanded by slightly more than two percent.
Source: VOA News