WASHINGTON (8/30/13)--The U.S. economy grew at a faster pace in the second quarter than previously estimated, with business investment and exports revised upward, resulting in a smaller trade deficit and inventory gains trumping the effects of federal budget cutbacks (The Wall Street Journal, Bloomberg.com and The New York Times Aug. 29).
The U.S. gross domestic product--the most comprehensive gauge of goods and services produced in the economy--increased at a 2.5% annualized rate in the second quarter, an upward revision from an initial 1.7% estimate last month, the Commerce Department said Thursday.
The economy's expansion is consonant with projections that the nation is withstanding the downward pull of higher taxes and federal budget cuts, and that the economy is set to pick up once those impediments dissipate, Bloomberg said.
Consumer confidence is being bolstered by home-price and employment gains--and that indicates households will sustain consumer spending, which is the largest part of the U.S. economy, Bloomberg said.
The economy is performing well and will weather sequestration, resulting in accelerating growth in the second half of the year, Brian Jones, a senior U.S. Economist at Societe Generale in New York, told Bloomberg.
WASHINGTON (8/30/13)--Initial U.S. claims for unemployment benefits declined more than forecast for the week ended Aug. 24, signaling continued improvement in the U.S. labor market (Moody's Economy.com and Bloomberg.com Aug. 29).
Claims fell 6,000--to 331,000 from 337,000 the prior week, the Labor Department said Thursday. Economists had predicted a drop to 332,000, according to a Bloomberg survey.
The four-week moving average of claims inched upward to 331,250 for the week ended Aug. 24 from 330,500 the previous week--which is not a substantial increase and is the first since early July, Moody's said.
Continuing claims for unemployment benefits decreased 14,000--to 2.989 million for the week ended Aug. 17.
Employers are maintaining their work forces as they prepare for escalating demand and improved growth when the effects of federal budget cuts and higher taxes start to diminish, Bloomberg said.
Although companies have been averse to cutting jobs, they have not been as successful in creating new jobs because they are preparing for political battles concerning new health care laws, the Federal Reserve's intention to reduce its stimulus and the national deficit, said Bloomberg.