Page 6 - ARUBA TODAY 28 AUG,2015

U.S. NEWS A7
Friday 28 August 2015

US Financial Front:

The US economy’s second quarter went from solid to stellar

M. CRUTSINGER Paul Ashworth, chief U.S.
economist at Capital
AP Economics Writer Economics, projects GDP
growth of 2.5 percent in
WASHINGTON (AP) — The the current July-September
quarter. “The economy re-
U.S. economy staged a gained a massive amount
of momentum in the sec-
far bigger rebound last ond quarter and all the
evidence from July’s activ-
quarter than first thought, ity and employment data
suggests that momentum
outpacing the rest of the continued into the third
quarter,” Ashworth said in
developed world and bol- a note to clients.
Mark Zandi, chief econo-
stering confidence that it mist at Moody’s Analytics,
is forecasting the economy
will remain sturdy in com- to grow around 2.8 percent
in third quarter and accel-
ing months despite global erate to a 3.5 percent an-
nual rate in the October-
headwinds. The economy December period. But he
said that is based on an ex-
as measured by gross do- pectation that the recent
market turbulence will not
mestic product expanded inflict long-lasting damage
on the economy.
at an annual rate of 3.7 “My forecast rests on the
assumption that this is a
percent in the April-June garden variety market cor-
rection, with stock prices
quarter, the Commerce dropping by 10 percent
from their recent high,”
Department reported Zandi said. “If we get a
bigger decline of 20 per-
Thursday. That’s more than cent, then that will hurt
consumption and housing,
a percentage point great- and we will not get the job
growth we are expecting.”
er than the initial 2.3 per-

cent estimate and a sharp Workers harvest early apples at Samascott Orchards in Kinderhook, N.Y. The Commerce Depart-
ment released second-quarter gross domestic product on Thursday, Aug. 27, 2015.
upgrade from the anemic
(AP Photo/Mike Groll)
0.6 percent advance dur-

ing the January-March The revision for second- ing construction jumped kets. The Dow Jones indus-
quarter growth was 7.8 percent, up from an ini- trial average closed up 369
quarter. broad-based, reflecting tial estimate of 6.6 percent points, following a surge
more robust spending by growth.Businesses spent Wednesday when stocks
To be sure, the GDP report consumers,businesses and more to restock their store rallied to snap a six-day los-
government. shelves as well. ing streak that saw the Dow
provides a backward look Consumer spending grew Also fueling growth were tumble about 1,900 points.
at annual rate of 3.1 per- strong gains in state and lo- Before the recent finan-
at the U.S. economy. Since cent, up from a 1.8 percent cal government spending, cial market turmoil, many
growth rate in the first quar- largely due to greater pub- economists had assumed
the spring, it has been hit ter. Business investment in lic construction outlays. that signs of an improving
structures and equipment U.S. stock markets shot up U.S. economy would lead
with deepening concerns was revised higher to show Thursday after the GDP the Fed to begin raising its
growth of 3.2 percent in- report and a strong day key short-term rate at its
about a slowdown in Chi- stead of a decline. Hous- across global financial mar- Sept. 16-17 meeting.q

na and recent turbulence

in global financial markets.

It remains unclear how the

U.S. will fare in the months

ahead if developments

abroad deteriorate.

The robust second-quarter

numbers, however, indi-

cate a level of growth

unmatched by the rest of

the developed world and

a solid footing heading

into the second half of the

year.

“The U.S. economy en-

tered the current market

turbulence with momen-

tum, which will help it to

shrug off the drag from

China and other develop-

ing economies,” said Di-

ane Swonk, chief econo-

mist at Mesirow Financial.

In contrast, Japan — the

world’s No. 3 economy

— shrank at an annual

pace of 1.6 percent in the

second quarter. Germa-

ny eked out 0.4 percent

growth, while the United

Kingdom expanded at a

modest 0.7 percent rate.

France didn’t grow at all.

The U.S. economy will prob-

ably cool slightly in the third

quarter, but economists still

expect solid growth that

should keep fueling jobs

and spending.