LOS ANGELES, CA (Catholic Online) - The economy has been showing signs of speeding up lately. On Tuesday, the government reported that the economy grew at a 2.0 percent pace in the third quarter. While it was down from an initial estimate of 2.5 percent, there were additional signs in the GDP report that bode well for fourth-quarter growth.

A decline in inventories in the July-September quarter could also mean businesses will have to rebuild inventories in the fourth quarter which could very well propel growth.

This could steer away the U.S. from recession, which is expected in the euro zone. Economists still see a risk of a U.S. recession next year, especially if lawmakers allow extended unemployment benefits and a payroll tax cut to expire at the end of 2011.

The Labor Department said initial claims for state unemployment benefits climbed to a seasonally adjusted 393,000 from an upwardly revised 391,000 in the prior week.
According to Reuters, economists had forecast claims rising to 390,000 from the previously reported 388,000. The four-week moving average of claims, considered a better measure of labor market trends, fell 3,250 to 394,250, the lowest since April.

The Commerce Department said orders for durable goods fell 0.7 percent in January following a September decline of 1.5 percent. Orders for core capital goods, considered a good proxy for business investment spending, dropped 1.8 percent, the biggest decline since a 4.8 percent fall in January.

In the meantime, manufacturing has been one of the strongest sectors in the economy in the sluggish recovery. This sector slowed this year as consumer demand faltered and auto factories had trouble getting parts following the March natural disasters in Japan.

The Commerce Department also reported that spending increased 0.1 percent last month, the poorest gain in four months. But incomes increased 0.4 percent, the best showing since March. Private wages and salaries drove the income gain.

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