"The economy is doing fine. It is going to weather the sequestration. Growth will accelerate in the second half."
- Brian Jones, a senior U.S. economist at Societe Generale
The pace of growth of the world's largest economy as well as the figures from the labour market surprised analysts on the upside and brought closer the prospect of a widely-discussed tapering of the Federal Reserve's quantitative easing programme. The second estimate of the nation's GDP published by the Department of Commerce Bureau of Economic Analysis showed the economy expanded 2.5% annualized rate in the second quarter, up from the initial projection of 1.7%. The majority of analysts, however, predicted a figure of 2.2%. The main contributor to growth came from the exporters, as the demand for goods produced in the U.S. soared 8.6%. Another key factor boosting economic growth was a gain in companies' investment, as even despite tighter inventories businesses managed to increase their spending by 9.9%, adding almost 1.5% to the overall growth.
In a separate report, as always on Thursday, the Labor Department said the number of American filing for applications for jobless benefits tumbled more than expected, cementing expectations of a sustain improvement in the labour market. Hence, the number of initial jobless claims in the week ended August 24 turned lower 6,000 to 331,000, down from the previous week's revised figure of 337,000. The four-week moving average, which is considered as a less volatile one, rose to 331,250 last week.
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