The US economy grew by 3.1 per cent in the third quarter of 2002 driven by brisk demand for cars.
Growth picked up sharply from the second-quarter figure of 1.3 per cent, the preliminary Commerce Department report showed. But the rate of expansion was slightly below most analysts' expectations.
Economists are forecasting a dip in growth in the last quarter of the year, however, fuelling speculation Federal Reserve chairman Mr Alan Greenspan may cut interest rates next week.
The Fed meets next Wednesday, a day after US congressional elections, to decide whether to lower the federal funds target rate, already at a 40-year low of 1.75 per cent, so as to stimulate economic growth.
Consumer spending again drove growth in the third quarter, with personal consumption expenditure surging 4.2 per cent as people bought new cars, lured by zero-interest financing offers.
But the outlook is fragile. A survey of consumer sentiment plunged this month to the lowest level in nine years, the Conference Board said Tuesday, as people worried about jobs, possible war in Iraq and slumping stock markets.
AFP