US growth much worse than thought

29 July 2011 Last updated at 14:57 GMT US economic growth is much weaker than first thought, government figures show.

The economy grew at an annualised rate of 1.3% in the second quarter, the Commerce Department said. Economists had forecast growth of 1.8%.

And in a surprise move, first-quarter growth was revised down sharply from 1.9% to 0.4%.

This evidence of economic weakness increases the pressure on the government as it attempts to increase its borrowing limit.

Slow growth makes it more difficult for the US to tackle its deficit.

If Congress does not raise the debt limit by 2 August, the US government could face funding shortfalls that it cannot meet by extra borrowing.

Continue reading the main story

Businesses can't hire until consumers start spending, but people won't spend unless they're sure they have jobs”

End Quote Carl Riccadonna Economist, Deutsche Bank President Barack Obama urged Democrats and Republicans in the Senate "to find common ground" on a plan to address the debt crisis.

"There are plenty of ways out of this mess. But we are almost out of time.

"If we don't come to an agreement, we could lose our country's triple A credit rating," he said. "That is inexcusable."

"On a day when we've already been reminded how delicate the economy is, we can end [this crisis] ourselves."

US markets opened lower, with the Dow Jones, the S&P 500 and the Nasdaq all falling 1% in early trade.

European markets, which were already in negative territory, saw further falls after the figures were released.

'Shocking'

After the revision, the US growth figures now correspond to a quarterly increase of just 0.1% in the first three months of 2011, followed by a 0.3% rise in the second quarter.

Economists had expected steady growth in the second quarter, now that supply constraints from Japan after the earthquake and tsunami are easing.

Continue reading the main story

The White House will see a silver lining in today's grim GDP figures, if they help to remind the negotiators on Capitol Hill of the fragility of the US recovery”

End Quote Stephanie Flanders Economics editor, BBC News The main reason for the lower-than-expected second-quarter figure was that consumer spending virtually ground to a halt, growing by just 0.1%, compared with 2.1% growth in the first quarter.

The large downward revision to the first quarter's growth figure was made as a result of lower capital investment and higher imports than first thought, and adjusting how seasonal factors are taken into account.

In addition, growth for the fourth quarter of 2010 was revised down from 3.1% to 2.3%, indicating that the economy had already started slowing before the end of last year.

Tim Ghriskey, chief investment officer at Solaris Asset Management, said the figures were "shocking".

"Clearly this is evidence of a mid-cycle slowdown. The only question now is do we see a pick-up in the second half and so far the economic data to date doesn't suggest that.

"You might have some analysts come out and talk recession, talk about a double dip. Right now none of the forecasts even come close to that but this is weak data."

Worse recession

The Commerce Department's Bureau of Economic Analysis makes annual revisions to its GDP estimates every July, incorporating more complete and detailed data.

It now says that the US recession of 2007-2009 was more severe than previously reported, with the economy shrinking by 5.1% over that period, rather than 4.1%.

But it also says that growth in 2010 was a bit stronger than it had first estimated.

It now puts 2010 growth at 3%, up from the previous 2.9%.

View the original article here

Mars 'formed much quicker than previously thought'

27 May 2011 Last updated at 13:35 GMT By Jennifer Carpenter Science reporter, BBC News Mars collided with relatively few rocky masses, hence its "embryonic" state, says researchers Mars formed in record time, growing to its present size in a mere three million years, much quicker than scientists previously thought.

Its rapid formation could explain why the Red Planet is about one tenth the mass of Earth.

The study supports a 20-year-old theory that Mars remained small because it avoided collisions with planetary building material.

The new finding is published in the journal Nature.

In our early Solar System, well before planets had formed, a frisbee-shaped cloud of gas and dust encircled the Sun.

Scientists believe that the planets grew from material pulled together by electrostatic charges - the same force that's behind the "dust bunnies" under your bed.

These proto-planetary dust balls grew and grew until they formed what scientists term "embryo" planets.

These rocky masses were large enough to exert a considerable gravitational force on surrounding material, including other nascent planets.

Nudging each other with their gravitational fields, the embryos were often thrown from their regular orbits, sometimes into the path of another large rocky mass.

If collisions occurred, these nascent planets were either expelled from the Solar System or shattered into pieces. These pieces were often combined to form a larger planet. In fact, the Earth's Moon is thought to be the result of an embryo planet colliding with our own planet.

By modelling this process, astro-physicists can determine the size of planets they expect to form at a given distance from the Sun. Mars is an outlier; it should have grown to around the size of the Earth, but remains about one-tenth its size.

Because of Mars' small size, many scientists have long suspected that the Red Planet avoided the collisions that allowed other neighbouring planets to increase their girth.

Red Runt

By studying the chemical composition of meteorites, geochemist Dr Nicholas Dauphas of the University of Chicago in Illinois and Dr Ali Pourmand of the University of Miami in Florida joined forces to try to confirm this.

By measuring the concentration of elements Thorium and Hafnium in 44 space-rocks Dr Pourmand and Dauphas have come up with the most precise estimate of the time it took Mars to form.

Between 2 and 3 million years they suspect; short compared to the Earth, which is thought to have taken tens of millions of years to grow to its current size.

"We were pleasantly surprised because now we have precise evidence in support of the idea… that Mars is a stranded planetary embryo", Dr Pourmand told BBC News.

He thinks that Mars was around more or less in its current size when the Earth was beginning to form.

Given this, Mars could not have experienced the same type of growth as the Earth and Venus, says Dr Pourmand.

It's likely that Mars remains small because it deftly avoided colliding with other planets.

"The fact that Mars appears to have been left unscathed could just be down to luck," says astrophysicist Dr Duncan Forgan of the University of Edinburgh, UK.

He explains that while it is unlikely that a planet could escape collisions for such long periods, statistically one expects it to happen from time to time.

When modelling planetary dynamics, researchers find it easier to predict what happens in general, he says, but it is much more difficult to determine what happens in specific solar systems, or in specific cases like Mars.

View the original article here