The US economy grew at an annualised rate of 5.9% in the last three months of 2009, revised official figures have shown.
The rate is higher than the first estimate of 5.7%.
The figures confirm the world's largest economy is emerging rapidly from recession.
According to economists, the rise was down to an increase in manufacturing output rather than stronger consumer spending.
In fact, growth in consumer spending was revised down from 2% to 1.7% in the quarter.
Manufacturing rose to meet the demand from retailers and businesses who had allowed stock levels to fall.
Business spending on equipment and software, for example, saw an 18.2% rise, while exports of US goods rose by 22.4% - the fastest pace in 13 years.
Source: BBC Feb 2010
The FPS Comment
After large infusions of liquidity into the economy by the US government, a temporary boost to growth figures is to be expected. Aided by re-stocking by industry and stronger exports.
However, despite the low interest rates, consumer spending has been subdued. Americans are nervous about high unemployment and not surprisingly are trying to save for a rainy day. It’ll take sustained growth rates before confidence returns.
We remain bearish on the medium term outlook for the US economy. Against the natural upswing that can be expected after a recession, there is the drag of debt on the economy by profligate government spending. It’s likely the dollar will end up taking the strain (it’s stronger at the moment due to wobbles in the Euro).
The hedge against inflation and a declining currency are hard assets. Buy good US property at foreclosed (ie government subsidised) prices and there should be long term benefit.
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