US economy growing at 3.2% in the fourth quarter, official figures show

A woman serving burgers in a cafe US economic activity has picked up strongly as consumers spend more

The US economy grew at a 3.2% annual rate for the final quarter of 2013, according to the country's Commerce Department.

Many predict that 2014 will produce the strongest growth since the end of the US recession in mid-2009.

Optimism over the health of the world's largest economy led to a further easing of the Federal Reserve's stimulus measures on Wednesday.

The Fed said it would cut monthly bond purchases by $10bn (£6bn) to $65bn.

Its bond-buying programme was designed to inject life into the economy and keep long-term interest rates low.

The US central bank had said this week that growth in economic activity had picked up since December.

It also said that consumer spending had boosted overall growth prospects.

Growth

Bill Blain - chief strategist at investors, Mint Partners, told the BBC that Thursday's numbers were encouraging.

"These figures are as expected and demonstrate that the US economy is recovering, it is strengthening. Many of the problems which were troubling the US economy such as a government slowdown are in the past, and we can think of this now as a sustained growth."

However, Mr Blain said that growth driven by consumer spending could cause pause for thought.

"We have to ask if the consumer boom is to continue, and if it is sustainable" he said.

'Cash-strapped'

"There are a lot of cash-strapped middle class people in America, and if interest rates do go up, we could see consumers struggle as they try and meet those potentially higher rates."

The latest GDP figure is the first of three estimates that will be made by the Commerce Department. For the whole of the 2013 period, the Commerce Department said that the US economy grew by 1.9%. that was far below the 2.8% expansion seen in 2012.

Spending cuts and higher federal taxes were considered to have restricted overall growth in 2013.

The economy grew by 0.8% in the fourth quarter of last year compared with the third quarter.

This figure is in line with economists' expectations.

More on This Story

US Economy

More Business stories

RSS

BBC Business Live

  1.  
    06:57: DONUTS BBC Radio 4
    donuts

    Dunkin' Donuts is back in the UK after a 20-year break, Today reports, with five outlets opened this year. The chief executive Nigel Travis tells Simon Jack that its donuts are an "affordable indulgence". He says they offer things like low-fat ice cream and coffees for those who don't want the high-calorie stuff, but most people don't go for it.

     
  2.  
    06:52: SONY SLUMPS
    PS4

    Despite a whopping net loss, there's one bright spot for Sony: Sales of gaming devices are up 83% compared to last year, driven by the popularity of the PS4 console.

     
  3.  
    06:46: SONY SLUMPS
    Sony

    Amid all the jubilancy on the Asian markets, one Japanese company continues to have a rough ride. Sony reported a net loss of 136bn yen (£800m) for for the past quarter, up from a loss of 19.6bn yen (£110m) in the same period last year. The struggling electronic giant says this was largely down to an "impairment of goodwill" in its mobile communications division - that is a decline in the value of intangible assets, such as brand recognition, reputation and intellectual property.

     
  4.  
    06:41: JAPAN BOOSTS STIMULUS BBC World News

    Martin Shulz, a Japan analyst from Fujitsu Research, tells World Business Report that "Abenomics" - the economic policies of prime minister Shinzo Abe - isn't working. "Abenomics is in trouble, the economy isn't improving enough," he says.

     
  5.  
    06:40: RBS BBC Radio 4
    RBS

    Simon Jack's back presenting the news on the Today programme this morning, looking ahead to the RBS results later. Filippo Alloatti from Hermes Investment Management says the bank will probably announce more money set aside to cover PPI claims plus something like £300m-350m to cover fines or expenses relating to the foreign exchange trading scandal.

     
  6.  
    06:24: HALLOWEEN BBC World News
    Rico Hizon

    The Live Page's favourite business reporter Rico Hizon is sporting a black-on-black jacket and shirt combo with an orange tie this morning to celebrate Halloween. "Nothing is spooking the markets", he quipped on Radio 5 Live earlier.

     
  7.  
    06:22: ASIAN MARKETS

    The markets in Japan have now closed, and investors are grinning from ear-to-ear.

    • The Nikkei 225 index surged 4.9% to 16427.06 (highest since November 2007)
    • In Hong Kong, the Hang Seng rose 1.2%, ending at 23990.24

    Stocks in mainland China, India and South East Asia are also up.

     
  8.  
    06:15: JAPAN BOOSTS STIMULUS
    yen

    Here is how the yen reacted to the news from the Bank of Japan - down against the dollar to a six-year low.

     
  9.  
    06:07: JAPAN BOOSTS STIMULUS Radio 5 live

    The Bank of Japan's decision is an attempt to "recharge a fragile economic recovery" and it seems like Prime Minister Shinzo Abe "is getting desperate", our very own Rico Hizon tells Wake Up to Money. He adds that the move "weakened the Japanese Yen against the US Dollar to a level not seen for six years".

     
  10.  
    06:00: JAPAN BOOSTS STIMULUS
    Bank of Japan

    This will give you a sense of how surprising the Bank of Japan's decision to pump more money into the economy was. Bloomberg reports that only three of the 32 economists it had surveyed expected the Bank to ramp up its stimulus programme. In its statement, the BoJ says it was worried about "downward pressure on prices" - or lacklustre inflation, to you and me.

     
  11.  
    06:00: Edwin Lane Business reporter, BBC News

    We're also looking forward to results from Royal Bank of Scotland at 07:00. In May the bank - still 80% owned by us taxpayers - reported profits of £1.6bn, but warned of a tough year ahead. Get in touch with us on bizlivepage@bbc.co.uk or tweet us @BBCBusiness. You email it, we'll publish it. Probably.

     
  12.  
    06:00: Joe Miller Business Reporter

    Good morning. The Bank of Japan has unexpectedly announced a boost to its monetary stimulus programme, in an effort to revive the country's flagging economy. The decision caused Asian markets to soar, with the Nikkei reaching a 7-year high. More on that, and the rest of the morning's business headlines, to follow.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.