MercoPress. South Atlantic News Agency

Obama upbeat with the EU deal and improved performance of the US economy

The president looks forward to a rapid implementation of the problem

President Barack Obama said on Thursday that European Union leaders have laid “a critical foundation” to solve the Euro zone debt crisis with their deal announced Wednesday evening.

“We look forward to the full development and rapid implementation of their plan,” Obama said in a statement released by the White House.

“We will continue to support the EU and our European allies in their efforts to address this crisis as we work together to sustain the global recovery and put our people back to work,” he said.

Earlier the White released an statement saying it was encouraged by data showing the US economy grew in the third quarter of 2011 but that faster expansion was needed to recover jobs and fortify the global economy.

“We are, nonetheless, at a fragile moment in the world economy, and cannot afford to do anything to undermine our economic recovery,” acting chief White House economist Katharine Abraham said in a statement.

“This report also underscores the need to put in place a balanced approach to deficit reduction that phases in budget cuts, instils confidence, and allows us to live within our means without short-changing future growth,” she said.

The US economy grew at its fastest pace in a year in the third quarter as consumers and businesses stepped up spending, creating momentum that could carry into the final three months of the year.

Though part of the increase in output came from the reversal of temporary factors that had restrained growth, the expansion was a welcome relief for an economy that looked on the brink of recession just weeks ago.

US GDP expanded at a 2.5% annual rate in the third quarter, the Commerce Department said in its first estimate Thursday. That was a jump from the 1.3% pace in the April-June quarter and matched economists' expectations.

Consumers and businesses appeared to have set aside their fears about the recovery in the third quarter.

Consumer spending was the strongest since the fourth quarter of 2010, while business investment spending was the fastest in more than a year.

Even businesses had not anticipated the fairly strong demand and were slow to restock warehouses.

A separate report from the Labour Department showed new claims for state unemployment benefits fell 2,000 last week to a seasonally adjusted 402,000, pointing to a gradual improvement in the labour market.