US shows third-quarter growth as fiscal cliff slowdown looms

Now Reading:

US shows third-quarter growth as fiscal cliff slowdown looms

Text size Aa Aa

The US economy grew faster that forecast in the third quarter.

Still economists believe the pace will soon slow and predict fourth quarter growth to drop back to below 2 per cent.

The rise is in part due to an increase in exports while consumer spending fell and business investment dropped for the first time in over a year.

Still the economy is going in the right direction for the moment.

Economists point to two reasons why the October- December figure is expected to be lower.

Superstorm Sandy closed businesses along the East Coast and concerned individuals are holding on to any spare cash until a deal is reached on the so-called fiscal cliff.

If President Obama fails to find a consensus between Republicans and Democrats before January 1, tax hikes and government spending cuts will come into force and the US will plunge into immediate recession.

It is reported that taxes for the average American will go up by some two thousand dollars if a deal is not reached.