The outlook for the US economy has improved modestly compared to our projections three months ago. This can be attributed largely to the unexpectedly rapid decline in risk premia, while the recovery in world trade appears to be being led by Asian markets, allowing a positive contribution to US growth from net trade in the short term. After a cumulative decline in output of 3.8 per cent in the US in the year to the second quarter of 2009, GDP probably recorded a rise in the third quarter, supported by a rise in consumer spending and a positive impact from net trade. We expect output to decline by 2.8 per cent in 2009 as a whole, and forecast a rise in US GDP of 1.3 per cent in 2010.