29 Jan 2011

US economy growing stronger

6:29 pm on 29 January 2011

Official figures from the United States suggest the economy is strengthening.

It grew at an annual rate of 3.2% in the final quarter of last year, faster than the previous quarter.

This compares with an annual GDP rate of 2.6% from the Commerce Department in the previous quarter.

A rise in consumer spending contributed to the growth, as did falling imports.

The Labor Department said that wages and benefits rose 2% in 2010, which is faster than 2009, but still the second slowest rate since records began.

The BBC reports the US economy grew by 2.9% in the whole of 2010, which is the strongest year of growth since 2005.

The news failed to lift Wall Street, which had one of its biggest one-day falls for weeks on fears about the unrest in Egypt. The Dow Jones index fell 166 points, or 1.4%, to 11,823 on Friday.

Home building made an unexpected contribution to the figures, growing 3.4%.

However, government spending contracted, with much of the fall coming from state and local government.