The US economy shrank at a smaller-than-expected 1 per cent annual pace in the second quarter, a recovery from the 6.4 per cent slump three months earlier, suggesting America is climbing out of recession.
Economists had expected a 1.5 per cent contraction in the second quarter. Company profits rose 5.7 per cent, the biggest increase since the first quarter of 2005, according to the Commerce Department. The GDP data is the second of three estimates the department releases.
Consumer spending, which makes up 70 per cent of the US economy, fell 1 per cent, less than the 1.3 per cent expected by economists.
Separate figures showed 570,000 Americans filed claims for unemployment benefits last week, down from 580,000 a week earlier, according to the Labor Department.
Helping stoke spending is the government’s `cash-for-clunkers’ program, which gives car buyers a discount of as much as US$4,500 to trade in older vehicles for more efficient models.
Stocks on Wall Street edged up after the data and on a late rebound …
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