Consumer spending drives stronger US growth
By Andrew Beatty, Agence France Presse, 4 hours ago

WASHINGTON — Boosted by stronger consumer spending, US economic growth nearly doubled to 2.5 percent last quarter, the Commerce Department said Thursday, quelling fears of a fresh downturn.

Americans spent more on everything from computers to services as figures squashed claims that the economy was stumbling into a double-dip recession -- sending already buoyant stock markets soaring.

Describing the report as "encouraging," Peter Newland of Barclays Capital noted "the bulk of the rebound... was centered in personal consumption, which was up 2.4 percent."

The prospect of the mighty US consumer reaching back to their pocketbooks raised hopes of a more firm-footed recovery after measly growth rates of 0.4 and 1.3 percent in the first two quarters sapped confidence.

"The bottom line is that the third quarter turned out to be a period of underlying strength," said Stephen Stanley, chief economist for Pierpont Securities.

Economists had expected the overall rate of growth to hit 2.3 percent.

Despite the relief, there were still concerns that this clip of growth is not enough to substantially bring down painfully high unemployment rates: a point the White House was quick to make.

"While the continued expansion is encouraging, faster growth clearly is needed to replace the jobs lost in the recent downturn and to reduce long-term unemployment," said Katharine Abraham of President Barack Obama's Council of Economic Advisers....