The Chamber of Commerce has welcomed the news that the US economy grew by 3.5 percent over the last quarter, but is cautiously optimistic about what this will mean for Bermuda.

Stephen Todd, president of the Chamber, said he would like to see a sustained period of growth in Gross Domestic Product in the US and admitted that the recession was still very much having an impact on the Island.

But Shadow Finance Minister Bob Richards is more sceptical, believing the US Government's Cash for Clunkers auto rebate programme accounts for half of that growth and that the American economy is still weak.

Results from the US government's commerce department revealed that the 3.5 percent annual rate of expansion between July and September was the economy's fastest pace of growth since the third quarter of 2007 and exceeded forecasts for 3.3 percent. Mr. Todd cautioned there was a long way to go yet before Bermuda and the rest of the world turned the corner, but added that there was some light at the end of the tunnel.

"I think it is a positive sign and it obviously holds a lot of optimism in terms of the recessionary areas improving," he said. "We are closely monitoring the situation and hopefully this is a reflecting a positive trend."

Mr. Todd said the findings of the report which showed that the American economy had expanded for the first time in more than one year as government stimulus packages like Cash for Clunkers and tax credits for first-time house buyers boosted consumer spending and home building, were significant due to the Island's economic reliance on major economies, such as the US.

"Again, from the standpoint of cautious optimism, we believe that as it continues to improve, we will hopefully see increased air arrivals and cruise ship passengers and more money spent in the local economy," he said.

Mr. Richards said most of the growth in the US economy was down to Cash for Clunkers to try to get people to buy cars, but that programme was finished now.

"About half of that growth is attributable to Cash for Clunkers, so that growth is very anaemic indeed, but most of the consumers are still not spending, so you need not get too het up about that report that came out today," he said.

Mr. Richards said the report did not mean much to Bermuda's economy, particularly in terms of tourism, which is a consumer-led industry, but rather to look at data on housing starts, initial claims for unemployment and consumer sentiment.

He claimed that he was the first to alert Government to the external pressures on the Island's economy, but added they did nothing about it at the time and were paying the price now.

"They have wasted so much money when they had it and now they need it and they don't have it," he said.

"This issue of external forces has become an excuse and a distraction - now it is about how we manage our own economic affairs in the face of a global recession."

Finance MInister Paula Cox said that despite efforts being made to stimulate the US economy, consumers were still some way from feeling buoyant, despite limited increases in spending.

She said that concerns about future earnings and the difficulty in getting jobs was likely to constrain consumer spending in the US, with similar patterns in Bermuda.

"People are still wary and being cautious," she said. "Business has changed in the twinkling of an eye and businesses have been forced to re-assess their business models. Consumers are still skittish, even while they wish to be hopeful.

"So though there has been some quantitative easing - one swallow does not a summer make. The road towards recovery is going to continue to have some bumps in it - not a smooth seamless incline upwards as we inch our way out of the recession."

Ms Cox said there may be a glimmer of hope, but ultimately there was still a lot of work to do, with Government striving to best position Bermuda to reap the rewards when the economy starts to fully recover.