igloo Posted October 30 Report Share Posted October 30 Gross Domestic Product Leaps Ahead Thursday, October 30, 2003WASHINGTON — The economy grew at a scorching 7.2 percent annual rate in the third quarter in the strongest pace in nearly two decades. Consumers spent with abandon and businesses ramped up investment, compelling new evidence of an economic resurgence.The increase in gross domestic product (search), the broadest measure of the economy's performance, in the July-September quarter was more than double the 3.3 percent rate registered in the second quarter, the Commerce Department (search) reported Thursday. The 7.2 percent pace marked the best showing since the first quarter of 1984. It exceeded analysts' forecasts for a 6 percent growth rate for third-quarter GDP, which measures the value of all goods and services produced within the United States. The economy's recovery from the 2001 recession has resembled the side of a jagged cliff; a quarter of strength often has been followed by a quarter of weakness. But analysts are saying that pattern could be broken, considering increasing signs the economy finally has shaken its lethargy and is perking up. Near rock-bottom short-term interest rates, along with President Bush's third round of tax cuts, have helped the economy shift into a higher gear during the summer, economists say. The next challenge is making sure the rebound is self-sustaining, they say. Democrats, however, argue that the tax cuts contributed to a record budget deficit in the recently ended 2003 fiscal year and have done little to spur significant job growth. Although the nation's payrolls grew by 57,000 in September — the first increase in eight months — the economy needs to add a lot more jobs than that each month to drive down the 6.1 percent unemployment rate, analysts have said. The administration has argued that as economic growth improves, meaningful job creation will follow. Bush will be counting on that as he heads into the 2004 presidential election season. In other encouraging economic news from the Labor Department (search), new claims for unemployment benefits last week dropped by 5,000 to 386,000, a sign that layoffs are slowing. U.S. workers' wages and benefits went up by 1 percent in the third quarter, up slightly from a 0.9 percent increase in the previous quarter. Amid signs that the recovery is regaining traction, the Federal Reserve on Tuesday decided to hold a key short-term interest rate at a 45-year low of 1 percent. Super-low short-term rates may give consumers and businesses an incentive to spend and invest more, boosting economic growth. Economists believe the economy will grow at a slower — but still healthy — 4 percent rate in the final quarter. In the third quarter, consumers ratcheted up their spending at a brisk 6.6 percent annual rate. That was the biggest increase since the first quarter of 1988 and was up from a 3.8 percent pace in the second quarter. Consumers in the third quarter spent lavishly on big-ticket items, such as cars, boosting such spending by a whopping 26.9 percent rate. And, they also spent briskly on "nondurables" such as food and clothes, which grew at a 7.9 percent pace, the strongest showing since the first quarter of 1976. While consumers have been the main force keeping the economy going, there are more signs that businesses are starting to do their part. Especially encouraging was the 15.4 percent growth rate in spending by businesses on equipment and software in the third quarter. That marked the largest increase since the first quarter of 2000 and was up from a 8.3 percent growth rate in the second quarter. Sustained turnarounds in capital spending and in hiring are crucial to the economy's return to full throttle. Economists said business wants profits to improve and wants to be sure of the recovery's vigor before it goes on a spending and hiring spree. The red-hot housing market, powered by low mortgage rates, also contributed to the strong showing on third quarter GDP. Investment on residential projects grew at a 20.4 percent rate, the biggest increase since the second quarter of 1996, and more than three times the 6.6 percent growth rate seen in the second quarter. Federal government spending, which grew at a 1.4 percent rate, was only a minor contributor to GDP in the third quarter. Spending on national defense was flat. But in the second quarter, military spending on the Iraq war — which grew at a whopping 45.8 percent rate — helped to catapult economic growth. A better trade picture in the third quarter also contributed to GDP growth. But inventory reduction by businesses continued to be a drag on the economy and reduced third-quarter GDP by 0.67 percentage point. And a continuing reluctance by businesses to build up stocks suggest that executives remain wary of the rebound's staying power. Quote Link to comment Share on other sites More sharing options...
PinkFloyd40 Posted October 30 Report Share Posted October 30 beat me to it Quote Link to comment Share on other sites More sharing options...
mr mahs Posted October 30 Report Share Posted October 30 BUSH IS BULLET PROOF IN 2004 Quote Link to comment Share on other sites More sharing options...
kramadas Posted October 30 Report Share Posted October 30 Sweet! Now the real test is to see how sustainable this is. Quote Link to comment Share on other sites More sharing options...
PinkFloyd40 Posted October 30 Report Share Posted October 30 Originally posted by raver_mania Sweet! Now the real test is to see how sustainable this is. no reasonable person expects to see 7+% growth in the long run... but its a sign that tax cuts and other growth promoting initiatives have been largely successful... we'll see great improvement in the labor market in mid 04 if we sustain 3.5-4.5% growth through 2Q04, even moreso if the traded situation remains static, or again greater if it were to continue growing in surplus.. Quote Link to comment Share on other sites More sharing options...
mr mahs Posted October 30 Report Share Posted October 30 This number is partially factored in to this market from the recent run up off the lows betting on a second half rebound. People knew the 3rd quarter would be strong the market is looking to the 4th quarter now that's why you don't see 200 point rally occuring right now but on the flip side if the number had come in weaker then expected then we would have been in trouble..Did I mention this?BUSH IS BULLET PROOF IN 2004 Quote Link to comment Share on other sites More sharing options...
kramadas Posted October 30 Report Share Posted October 30 Originally posted by PFloyd40 no reasonable person expects to see 7+% growth in the long run... but its a sign that tax cuts and other growth promoting initiatives have been largely successful... we'll see great improvement in the labor market in mid 04 if we sustain 3.5-4.5% growth through 2Q04, even moreso if the traded situation remains static, or again greater if it were to continue growing in surplus.. I didn't mean to say 7+% sustainable - but 5 % would be great. Regarding Bush being bulletproof....it depends on when the lagging indicator actually picks up. Most people are not going to judge him by the growth rate, but by the employment rates. Plus, there's a whole lot of questions about his foreign policy/going to war.Time will tell. Quote Link to comment Share on other sites More sharing options...
igloo Posted October 30 Author Report Share Posted October 30 Originally posted by raver_mania I didn't mean to say 7+% sustainable - but 5 % would be great. Regarding Bush being bulletproof....it depends on when the lagging indicator actually picks up. Most people are not going to judge him by the growth rate, but by the employment rates. Plus, there's a whole lot of questions about his foreign policy/going to war.Time will tell. Forget Bush for a moment......his potential competitors are clueless and the party they represent lost...The debates are laughable and sad Quote Link to comment Share on other sites More sharing options...
mr mahs Posted October 30 Report Share Posted October 30 Originally posted by igloo Forget Bush for a moment......his potential competitors are clueless and the party they represent lost...The debates are laughable and sad Did you see clark blaming bush for 911?That's got "Clit-on" all over it. Quote Link to comment Share on other sites More sharing options...
igloo Posted October 30 Author Report Share Posted October 30 Originally posted by mr mahs Did you see clark blaming bush for 911?That's got "Clit-on" all over it. Read the article I posted about the rot in the Dem party Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted October 30 Report Share Posted October 30 Originally posted by mr mahs Did you see clark blaming bush for 911?That's got "Clit-on" all over it. clark is so close to gore its not funny. if he wins the primary i will be very pissed off Quote Link to comment Share on other sites More sharing options...
igloo Posted October 30 Author Report Share Posted October 30 Originally posted by bigpoppanils clark is so close to gore its not funny. if he wins the primary i will be very pissed off Better than Dean Quote Link to comment Share on other sites More sharing options...
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