‘Not out of the woods’ yet is the word coming from across the Atlantic, but the US economy has had its second piece of good news in as many days with growth figures for the first quarter that are better than expected. Previous estimates were for a sluggish 0.6 percent, but the final was figure is 0.9.
It still looks feeble compared to America’s major competitors, but they should be warned as the dollar’s continued weakness is battering their exporters, who are selling less, while the US is selling more. Exports were up nearly three percent for the same period, boosting overall growth.
The commentators who were suggesting the US is already in recession appear confounded, as the normal definition of recession is two quarters of contraction and back in January that is what some were predicting as job figures turned negative.
The economy is still struggling with a weak housing market, slumping consumer confidence and a severe banking crisis. Second quarter growth is forecast at just 0.4 four percent.