Economic growth revised down but jobless claims hit 44-month low
The U.S. economy grew at a sluggish annual rate of 1.8% from July through September, down from earlier estimates, the government said Thursday.
The new data threw some cold water on hopes that the economic recovery had picked up significant steam in the second half of the year. The initial estimate of third-quarter growth, released in October, was 2.5%, but the Commerce Department's Bureau of Economic Analysis has revised it down twice since then.
Thursday's figure was the final one, and came in somewhat below the 2% level that most economists had expected. Fourth-quarter data will be released early next year.
The third quarter still showed faster growth than the 1.3% rate for the second quarter, and has allayed fears that the nation was headed toward another recession. Increased consumer spending helped fuel the improvement in the third quarter, but budget cutting by state and local governments remained a drag on growth, the Commerce Department said.
The new data was offset somewhat Thursday by continued improvement in the employment picture. New jobless claims declined again last week, falling to 364,000, the lowest level since April 2008, the Labor Department said.
The number of initial unemployment claims was down from the previous week's revised figure of 368,000, and the four-week average of 380,250 is below the 400,000 figure that economists say is key to cutting into the unemployment rate.
-- Jim Puzzanghera in Washington
Photo: Gwen Williams of Norton Shores, Mich., outside Rep. Bill Huizenga's Muskegon office during a rally this month calling on Congress to extend unemployment insurance benefits, which will expire Dec. 31. Credit: Muskegon Chronicle / Associated Press