US Economy Grows at Fastest Pace in a Year

October 28 00:00 2011

New York, October 28 ( – With consumers and businesses shrugging off fears of a new recession, the US economy grew at its fastest pace in the year during late summer, according to a government report released Thursday. The stock market soared to its best day since August. Investors were also encouraged by the news that an agreement had been reached between European leaders for finding a solution to the euro zone debt crisis.

Standard & Poor’s 500-stock Index was up 3.4 percent at the end of trading and European markets also soared with German Dax index up 5.3 percent.

Although a lot remains to be done to complete the agreement in Europe and to sustain the 2.5 percent pace of US economic expansion in the third quarter, a sense of relief was infused on both sides of the Atlantic by the news on Thursday.

Jerry Webman, chief economist at Oppenheimer Funds said, “The Europeans told us they’re doing what they can do to take the immediate fear of financial collapse off the table, and the GDP numbers tell us that the U.S. economy did not collapse in the third quarter. Together they are a kind of sigh of relief.”

The Commerce Department said that GDP rose at a 2.5 percent annual pace in the July-through-September quarter, which was a marked improvement over the 1.3 percent gain in the second quarter and the 0.9 percent gain of growth for the first half of 2011.