Modest Growth Eases Double-Dip Recession Fears

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A new government report that the U.S. economy grew modestly over the summer sparked a rally on Wall Street and eased concerns of a double-dip recession.

The U.S. economy expanded at a rate of 2.5 percent, according to the government reports from July through September.

Buoyed by the news, the Dow Jones industrial average closed up 340 points, Thursday, putting October on track to be the single best month for the market in 25 years.

"I think investors are now rushing back in," Standard & Poor's market analyst Sam Stovall said.

Economic experts cite consumer spending as the primary reason for the growth. For people like Alan Goldberg, a car is once again on the shopping list.

"I've been saving, and today the price is right. The deal was good," Goldberg said.

Ford Motor Company posted its ninth straight profitable quarter, and stores are starting to stock up for the holidays.

"You can only patch up the old pair of shoes or scratch the rust off the bumper of your car for so long," Deutsche Bank economist Carl Riccadonnae.

"We are absolutely heading in the right direction," he added.

The news comes as European leaders announced a critical deal to help stabilize the region's debt crisis.

The private sector wrote off half of Greece's public debt, and the European bailout fund will be expanded to keep countries like Italy and Spain out of more financial trouble.

President Obama said Europe's growth is critical for the U.S. economy.

"That's going to have an impact on our businesses and our ability to create jobs here in the United States," the president said.

However, the White House remained cautiously optimistic.

"The 2.5 percent is better than we had in the previous quarter and the quarter we had before that, but it is not good enough by a long shot," White House Press Secretary Jay Carney said.

The biggest economic concern for the U.S. is the high unemployment rate. That 2.5 percent growth rate isn't enough to bring the jobless rate down from 9 percent, where it's been stuck for six months.

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