The economy received a welcome boost from president Barack Obama's £480 billion economic stimulus plan, as well as the US equivalent of the Cash for Bangers scheme - Cash for Clunkers.
Figures released from the US commerce department surpassed predictions by financial forecasters, who at best had thought GDP growth would reach 3.2 per cent. Growth was helped by better consumer spending figures and investment in home-building.
However, unemployment remains high and analysts are said to be waiting for further 'good news' before America is officially declared as being out of recession.
Commenting on the new figures and aid for small businesses on Thursday, Mr Obama said: 'This is the largest three month gain we have seen in two years.
'But I know we still have a long way to go. Even in good times starting a business is not easy.
'But I don't have to tell you that over the last few years it's been particularly hard. We know how tough times have been for small businesses.
'That's why we put a tax cut into the pockets of most small business employers and employees.
'We're serious about creating a climate where our entrepreneurs can succeed.'
Also discussing the figures, Duncan Higgins, senior analyst at Caxton FX said that 'there will inevitably be reservations about the extent of this recovery when the vast government stimulus measures are factored in.'
Today's figures were buoyed by manufactured products and the housing market, which both saw considerable improvements. Total government spending was up 7.9 per cent, as the wider stimulus spending continued to take effect.
'In response to the news, the US dollar has continued to weaken against sterling, falling a further 0.2 per cent, prolonging a recent rally built on increasing risk appetite,' Mr Higgins added.
'The markets are now tentatively trying to put risk back on the table and investors are beginning to move back into higher-yielding currencies as the global economic recovery looks to be underway.'
Figures released from the US commerce department surpassed predictions by financial forecasters, who at best had thought GDP growth would reach 3.2 per cent. Growth was helped by better consumer spending figures and investment in home-building.
However, unemployment remains high and analysts are said to be waiting for further 'good news' before America is officially declared as being out of recession.
Commenting on the new figures and aid for small businesses on Thursday, Mr Obama said: 'This is the largest three month gain we have seen in two years.
'But I know we still have a long way to go. Even in good times starting a business is not easy.
'But I don't have to tell you that over the last few years it's been particularly hard. We know how tough times have been for small businesses.
'That's why we put a tax cut into the pockets of most small business employers and employees.
'We're serious about creating a climate where our entrepreneurs can succeed.'
Also discussing the figures, Duncan Higgins, senior analyst at Caxton FX said that 'there will inevitably be reservations about the extent of this recovery when the vast government stimulus measures are factored in.'
Today's figures were buoyed by manufactured products and the housing market, which both saw considerable improvements. Total government spending was up 7.9 per cent, as the wider stimulus spending continued to take effect.
'In response to the news, the US dollar has continued to weaken against sterling, falling a further 0.2 per cent, prolonging a recent rally built on increasing risk appetite,' Mr Higgins added.
'The markets are now tentatively trying to put risk back on the table and investors are beginning to move back into higher-yielding currencies as the global economic recovery looks to be underway.'
No comments:
Post a Comment