By Nick Mann | 29 November 2012
The US economy grew faster than previously estimated in the three months ending in September, the Department of Commerce said today.
Gross domestic product rose by 2.7%, higher than the 2% estimated last month. The latest figure is based on more complete data, the department explained.
It compares with 1.3% growth posted in the previous three months. The department attributed this to an upturn in federal government spending, companies building up inventories of stock and a slowdown in imports.
There was further good news for the US economy as the Department of Labor revealed that the number of new claims for unemployment benefit fell in the week ending November 24. In total, 393,000 signed on as being out of work, 23,000 less than the previous week.
Yesterday, US president Barack Obama said he was hopeful that a political agreement could be reached before Christmas to avoid the ‘fiscal cliff’ – a package of automatic spending cuts and tax increases which analysts have warned could send the US economy into recession.
‘Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced,’ he said. ‘That kind of agreement would be good for our businesses; it would be good for our economy; it would be good for our children’s future.
‘And I believe that both parties can agree on a framework that does that in the coming weeks. In fact, my hope is to get this done before Christmas.’
Obama reiterated his call for Republicans in Congress to back a bill to extend tax cuts for families earning $250,000 or less – 98% of families – but increase taxes for the remaining 2% on January 1.
‘Even the wealthiest Americans would still get a tax cut on the first $250,000 of their income. So it's not like folks who make more than $250,000 aren't getting a tax break, too. They're getting a tax break on the first $250,000, just like everybody else,’ he explained.
‘Families and small businesses would, therefore, be able to enjoy some peace of mind heading into Christmas and the New Year,’ he added. ‘And it would give us more time then next year to work together on a comprehensive plan to bring down our deficits, to streamline our tax system, to do it in a balanced way – including asking the wealthiest Americans to pay a little more, so that we can still invest in things like education and training, and science and research.’
The Republican Speaker of the House of Representatives, John Boehner, said yesterday the party was ‘eager’ to finalise a spending plan that could pass both chambers of Congress. Speaking after a meeting with a ‘Fix The Debt’ coalition of business leaders, Boehner said: ‘To show we’re serious about reaching a bipartisan agreement, we have offered to accept some new revenues, provided the revenue comes from tax reform and is accompanied by significant spending cuts. Without spending cuts and entitlement reform, it is impossible to address our country’s debt crisis. We put revenue on the table,’ he said.
‘Now, it’s important for President Obama and congressional Democrats to tell the American people what spending cuts they're willing to make, and I’m hopeful the ‘Fix the Debt’ coalition will call on them to do so.’
