The Commerce Department has today revealed that the US economy contracted at an annual rate of 1% during the second quarter - unchanged from an initial estimate released in July, and better than market expectations for a 1.5% contraction.
The data is almost certain to back up the fact that the economy is starting to recover after its worst recession in decades.
The 1% contraction during the April to June period is also considerably better than the 6.4% contraction in the January to March period.
In addition, a report from the Labor Department revealed positive news after the number of US workers filing new claims for jobless benefits declined last week to 570,000 from the 580,000 reported the previous week.
Meanwhile, the news comes just a day after the Commerce Department revealed a rise in orders for US durable goods and an increase in new home sales.
Orders for US goods (expected to last several years) rose 4.9% in July - the most since July 2007 and exceeded analysts expectations of a 3% gain.
Orders for durable goods were boosted by the success of the US Government’s Car Allowance Rebate System (CARS), branded the “cash for clunkers” scheme.
This helped US car orders grow 0.9%, recovering from previous monthly falls in May and June.
In the meantime, the Commerce Department reported a rise in the purchase of new homes in the US, rising 9.6% in July, again exceeding analysts forecasts and the biggest rise in almost a year.
New home sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000.
Also this week, the world’s largest economy revealed a rise in consumer confidence.
The closely-monitored Consumer Confidence Index from the Conference Board business organisation grew to 54.1 from an upwardly revised 47.4 the previous month.
The reading exceeded market expectations but it is still well below the 90 mark - the minimum level associated with a healthy economy. Anything above the 100 mark indicates strong growth.
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