US Economy Surpasses Forecasts

Second-quarter growth rate higher than expected
By Caroline Zimmerman,  Newser User
Posted Jul 27, 2007 12:05 PM CDT
Richard Zboray, right, and George Eckstein, both of Van der Moolen Specialists, look at a monitor from the floor of the New York Stock Exchange, Friday, July 27, 2007, in New York. Wall Street extended...   (Associated Press)
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(Newser) – Sumbrime-lending and housing-market woes didn't hold back the rest of the economy in the second quarter, as overall growth exceeded expectations and hit a 3.4% projected annual rate, the government said today. Economists pointed to the expanding global economy, which drives demand for exports, as well as greater business investment and government spending to explain the jump.

Analysts expressed hope that the good news, which came at the end of a weeklong stock-market selloff, will help restore global confidence in the US economy despite the housing slump and a slowdown in consumer spending, Bloomberg reports. The growth rate was just 0.6% in the first quarter, and economists aren't sure the trend will last.