US economy gains speed but economists contend progress might not last

Alexandra Frean, US Business Correspondent & , : {}

The economy of the United States stretched some-more energetically than formerly thought in the fourth entertain of 2009, display the greatest climb in 6 years. But economists warned that the progress to expansion might blur during this year as the goods of the Governments impulse wear off.

Separate total display a warn thrust in residence sales additionally lifted regard about the sustainability of Americas lapse to mercantile growth.

According to the US Commerce Department, the economy stretched 5.9 per cent in the fourth entertain of 2009, an alleviation from an progressing guess of 5.7 per cent.

The ceiling rider was driven by certain contributions from commercial operation investment and inventories, but consumer spending was less than creatively thought.

Related LinksObama impulse on margin of Senate approvalUS economy soars 5.7 per cent in fourth entertain

The fourth-quarter figure compares with 2.2 per cent expansion in GDP in 2009s third quarter, light the worlds greatest economy from retrogression after 4 buliding of contraction. For the full year of 2009, GDP fell 2.4 per cent, the greatest full-year decrease given the 10.9 per cent available in 1946.

The improved than approaching US GDP total come after interpretation from the Office for National Statistics, that indicated that Britain emerged from retrogression some-more strongly than formerly thought in the fourth quarter, with 0.3 per cent growth, compared with an strange guess of 0.1 per cent.

The US interpretation was keenly awaited after stagnation interpretation on Thursday that was worse than expected, display new jobless claims of 22,000 last week, giving a seasonally practiced 496,000. The total additionally coincided with interpretation suggesting that the housing markets liberation is faltering.

The US National Association of Realtors pronounced that sales of formerly assigned homes had depressed by some-more than expected, at a rate of 7.2 per cent in January, to a seasonally practiced annual rate of 5.05 million, from 5.44 million in December. Lawrence Yun, the traffic groups arch economist, pronounced that the results, the weakest given Jun 2009, were positively not good.

Markets gave a churned greeting to the data. After descending 45 points in early trading, the Dow Jones industrial normal was prosaic at 10,322 by lunchtime. The SP 500 was additionally prosaic at 1,102.87.

The revised American GDP total show that collateral output by firms on apparatus and program is estimated to have risen by 18.2 per cent, opposite 13.3 per cent in primary estimates.

Consumption expansion was revised down somewhat to 1.7 per cent, from 2 per cent. The figure for traffic expansion was revised up to 22.4 per cent, from 18.1 per cent, but the figure for imports was revised up some-more neatly to 15.3 per cent, from 10.2 per cent, shortening the grant from net outmost traffic to 0.3 per cent, from 0.5 per cent.

The rate at that inventories were run down in the fourth entertain slowed by some-more than formerly thought, contributing 3.9 commission points to GDP, opposite the prior guess of 3.4. Although rebuilding of inventories is giving the economy a proxy progress as a reserve of projects put on hold during the retrogression is worked through, not all analysts design it to last.

Paul Ashworth, of Capital Economics, expects inventories to give a clever progress to GDP expansion in this years initial half, as bonds begin to grow, rather than merely cringe some-more slowly, but he pronounced that the progress would blur in the second half as bonds returned to normal levels.