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New report: Consumer spending gives modest boost to economy

  • FILE - This Sept. 2, 2011 file photo, shows a shopper reading a product label at Costco Wholesale in Mountain View, Calif. The U.S. economy grew modestly over the summer after nearly stalling in the first six months of the year, lifted by stronger consumer spending and greater business investment. (AP Photo/Paul Sakuma, File)

WASHINGTON — A summer of modest economic growth is helping dispel lingering fears that another recession might be near.

Whether the strength can be sustained is less certain.

The economy grew at an annual rate of 2.5 percent in the July-September quarter, the Commerce Department said Thursday. But the growth was fueled by Americans who spent more while earning less and by businesses that invested in machines and computers, not workers.

The expansion, the best quarterly growth in a year, came as a relief after anemic growth in the first half of the year, weeks of wild stock market shifts and the weakest consumer confidence since the height of the Great Recession.

The economy would have to grow at nearly double the third-quarter pace to make a dent in the unemployment rate, which has stayed near 9 percent since the recession officially ended more than two years ago.


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