U.S. economy shows strong growth in third quarter

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WASHINGTON, D.C. — There is good news this morning for carriers worried about how the sluggish economy will affect the volume of transborder shipments.

The U.S. economy soared ahead in the third quarter, expanding at an annual rate of 7.2 per cent, the U.S. Department of Commerce said Thursday in a report that sailed past the already optimistic forecasts for the quarter. In fact, the third quarter results mark the fastest pace of growth for the world’s biggest economy since 1984. It was also twice the 3.3-per-cent rate of growth recorded in the second quarter of the year.

On average, economists had been expecting the gross domestic product the broadest measure of economic activity – to grow at an annual rate of 6 per cent in the quarter.

Although most forecasts now suggest an economic pullback in the fourth quarter, the full-year growth for the U.S. economy is still expected to come in at a healthy 4 per cent. That’s welcomed news to Canadian exporters (about 85% of our exports are absorbed by the U.S. markets) and the carriers hauling their goods south of the border. It may also be the kind of shot in the arm the Canadian economy requires after the shocks it suffered during the second quarter (SARS, mad cow, blackout, rising dollar, B.C. forest fires).

Particularly noteworthy is the fact that U.S. business spending, one of the main laggards in terms of a return to growth, finally sprang back to life in the third quarter.

Business spending jumped 11.1 per cent during the period. That’s the best showing since 2000.

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