US economy grows slower than projected; expands 2.8% in Dec quarter

WASHINGTON: The world’s largest economy US grew at a slower pace than projected, expanding just 2.8 per cent in the last three months of 2010.

The downward revision from the earlier estimate of 3.2 per cent was mainly on account of lesser consumer spending.

“Real gross domestic product -- the output of goods and services produced by labour and property located in the US -- increased at an annual rate of 2.8 per cent in the fourth quarter of 2010,” US Bureau of Economic Analysis said today.

The American economy, which fought the financial meltdown with heavy doses of stimulus, had expanded 2.6 per cent in the 2010 September quarter.

Consumer spending rose 4.1 per cent in the last three months of 2010 as against earlier projection of 4.4 per cent.

Going by official data, the fourth-quarter growth of 2.8 per cent reflected positive contributions from personal consumption expenditures (PCE), exports, and non-residential fixed investment.

But these gains were partly offset by negative contributions from private inventory investment and state and local government spending, BEA said in a statement.

The market value of the national economy stood at USD 14.86 trillion in December-end, 2010.

Global economy is seeing a fragile recovery, led by emerging nations, while many advanced economies are still grappling with sluggish growth.

Meanwhile, latest figures released today showed that UK economy contracted more than expected at 0.6 per cent in the last three months of 2010.

During the same period, euro zone -- a grouping of 16 nations that share the common currency euro -- registered a growth of 0.3 per cent.

UK economy slumps more than expected; slips 0.6% in Dec qtr

LONDON: The British economy contracted more than expected at 0.6 per cent in the last three months of 2010, bogged down by poor performance of construction and services sectors.

The UK, which has embarked on significant austerity measures, continues to grapple with sluggish economic situation even as European giants, including Germany and France, have registered relatively better quarterly growth.

“Gross domestic product contracted by 0.6 per cent in the fourth quarter of 2010, revised down from the previously estimated fall of 0.5 per cent.

“GDP in the fourth quarter of 2010 is now 1.5 per cent higher than the fourth quarter of 2009,” UK’s Office for National Statistics said in a statement today.

In the three months ended September 2010, the national economy had expanded 0.7 per cent.

The economic contraction in the December quarter was mainly triggered by sharp declines in output of construction and services industries.

As per the revised estimates, construction output slumped 2.5 per cent in the December quarter, while that from services sector dropped 0.7 per cent.

“In the fourth quarter of 2010, the trade deficit in real terms increased to 10.2 billion pounds from 9.3 billion pounds,” the statement said.

To boost the country’s financial situation, the UK government has resorted to severe austerity measures including spending cuts.

Meanwhile, the 16-nation euro zone economies grew 0.3 per cent in the December quarter. During the same period, German and French economies grew 0.4 per cent and 0.3 per cent, respectively.