Tuesday, November 26, 2002

BBC NEWS | US economy storms ahead 3rd Quarter

Strong government spending, higher domestic investment and buoyant car sales have combined to make the US economy grow at an annual rate of 4% in the three months of July, August and September.

But economists warn that the momentum of growth is fading fast. Forecasters at the National Association for Business Economics cut their forecast for growth during the last three months of 2002 to just 1.4%, well down from their 2.7% estimate two months ago.

Experts point to data from October which suggest lower car sales and weaknesses in manufacturing.

There are also worries about the economic impact of a possible war with Iraq.

[In a New York Times poll] for the first time in two decades, the majority of workers said they would join a union to protect their jobs and working conditions.

And 70% said the economy was worse than two years ago, with 39% fearing it could get worse as opposed to just 13% who thought it would get better.

Speaking to the BBC, Hewlett-Packard boss Carly Fiorina said that she believed there would only be a modest (2-3%) recovery in spending on computer equipment in 2003.

I expect not great Christmas sales despite a slight rebound in optimism, there are fewer shopping days this Christmas.

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