WASHINGTON, Oct. 29 (UPI) -- The U.S. Department of Commerce said the economy grew 3.5 percent in the third quarter, the first gain since the second quarter of 2008.
Forecasters had predicted growth of about 3.2 percent in the quarter ending Sept. 30, driven largely by federal stimulus spending and increased business investment. The Los Angeles Times reported that the economy has contracted for four consecutive quarters but growth in the most recent quarter suggests the worst recession since the Great Depression has passed, economists said.
Lynn Reaser, an economist and president of the National Association for Business Economics, told the newspaper the U.S. economy is "on the start of a recovery track and one that is sustainable."
The economy has more than 3.5 percent to make up, having dropped 6 percent last fall and winter and unemployment is lagging in the recovery, the Times said.
Forecasters expect weak growth in the next two quarters and no substantial improvement in hiring until mid-2010, the Times said.
The third quarter's growth came with a hint of inflation, which rose 1.6 percent after rising 0.5 percent in the second quarter. But such a gain is likely to ease fears of deflation more than spark fears of high inflation, as unemployment remains high at 9.8 percent.
