WASHINGTON, Sept 29: Brisk consumer and business spending pushed the US economy ahead at a 3.3 per cent rate in the second quarter, while a weekly gauge of jobless-pay claims pointed to a potentially limited impact from Hurricane Katrina, according to government reports on Thursday.

The reports implied the economic expansion had considerable momentum entering the third quarter, before hurricanes Katrina and Rita struck, and that labour markets outside the affected Gulf Coast region still had some vigour.

The Labour Department is scheduled to issue its report on September employment next Friday, with economists surveyed by Reuters predicting non-farm payrolls will show a 125,000-job drop.

The hurricanes at the end of August and in September are expected to exert some drag on third-quarter GDP, before rebuilding of damaged areas adds stimulus back.

New claims for jobless pay fell more than expected, by 79,000 last week to 356,000 as hurricane-related applications declined, the Labour Department said. That sent prices for US debt securities lower as investors read it as a sign the Federal Reserve was likely to keep pushing interest rates up.

In a final estimate of second-quarter gross domestic product, the broadest measure of national economic performance, the Commerce Department left unchanged its estimate of growth that it published a month ago.

It said revisions upward in spending were offset by somewhat weaker exports of services and inventory-building than it previously thought, leaving second-quarter GDP growth at 3.3 per cent, down from 3.8 per cent in the first quarter.

It was the ninth straight quarter in which the economy has grown at rates exceeding 3 per cent, a solid performance that is expected to be tested in the third quarter when the effects of Katrina and a follow-on hurricane Rita begin to show up.

—Reuters