U.S. economy grows at slightly faster pace

The economy grew slightly faster last summer as Americans spent a little more freely. Yet it remains too weak to reduce high unemployment before Tuesday’s elections. The Commerce Department says the economy expanded at a 2% annual rate in the July-September quarter. It marked an improvement from the feeble 1.7% growth in the April-June quarter. Consumers helped boost last quarter’s economic growth with 2.6% growth in spending. That was better than the second quarter’s 2.2% growth rate and marked the biggest quarterly increase since a 4.1% gain at the end of 2006 before the recession hit. A stock-market rebound made people feel better about spending. Bargains, on everything from cars to home furnishings, also drew them out. Consumer spending accounts for much of the nation’s economic activity, and thus plays a major role in determining the vigor of the economic rebound. But to have any impact on the 9.6% unemployment rate, consumers need to spend even more and the economy would need to rack up growth of 5% for a full year. Growth in the October-December quarter isn’t expected to improve much. A new AP Economy Survey estimates a 2.4% pace. If that’s the case, the economy will end 2010 on weaker footing than it started. In the January-March quarter, the economy expanded at a 3.7% pace.