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| U.S. GDP Grows at 8.2 Percent Pace in 3Q |
| 2003-11-25 |
| (edited for brevity.) The economy roared ahead at an astounding 8.2 percent annual rate in the third quarter, the fastest pace in nearly two decades and a much stronger performance than previously thought. The revised GDP, released by the Commerce Department Tuesday, was a full percentage point higher than the 7.2 percent growth rate estimated a month ago. The new estimate, based on more complete data, reflected stronger investment by business on new equipment and software, less severe cuts in companies’ inventories and more brisk spending on residential projects. Those were the main factors behind the upward revision to third-quarter GDP, which is considered the broadest barometer of the country’s economic health. "I think there’s a better mix of growth in this report, with capital spending being a major portion of the upward revision," said economist Ken Mayland, president of ClearView Economics. "The economy is regaining the confidence of businesses and they are stepping up to the plate and spending and investing for the future." In other economic news, consumer confidence climbed in November to its highest level in more than a year, the Conference Board reported. The private research group’s consumer confidence index rose to 91.7 in November, up from a revised 81.7 in October. Sales of previously owned homes, meanwhile, fell by 4.9 percent in October to a seasonally adjusted annual rate of 6.35 million, the National Association of Realtors said. Even with the decline, October’s sales marked the third best month on record. In the GDP report, the 8.2 percent growth rate — more than double the 3.3 percent pace registered in the second quarter — represented the best showing since the first quarter of 1984, when the economy surged at a 9 percent pace. Economists were predicting third-quarter GDP would be revised up, with estimates ranging from a 7.3 percent pace to an 8 percent pace. Near rock-bottom short-term interest rates and President Bush’s third round of tax cuts motivated businesses and consumers to spend and invest more, helping the economy to move at such a fast clip in the third quarter, economists say. The next challenge is making sure the rebound is lasting. The Bush administration believes the economy is poised for solid growth and stronger job creation in the months ahead. That is politically important to Bush as he heads into the 2004 campaign. Democrats, however, blame Bush for the loss of 2.3 million jobs since he took office in January 2001 and argue that the tax cuts contributed to the record 2003 budget deficit. For out-of-work Americans, though, it probably doesn’t feel like much of an economic recovery. Only recently has the battered labor market shown signs of improving. In October, the unemployment rate improved fractionally, to 6 percent, as the economy added jobs for the third straight month. 6% unemployment; most economists would tell you that means actually closer to 1% real unemployment as there are usually always 5% of all able bodied Americans who don’t work.Steady improvements in job creation and in capital investment are crucial ingredients for the economic recovery to be self sustaining, economists say. Analysts believe the economy will grow at a slower, but still healthy rate of at least 4 percent in the current October-to-December period as some of the stimulus provided by the tax cuts and a surge in mortgage refinancing fade. In the GDP report, consumers continued to do their part to keeping the economy going. They boosted spending in the third quarter at a 6.4 percent rate. That was up from a 3.8 pace in the second quarter, but down slightly from the 6.6 percent rate previously estimated for the third quarter. Especially encouraging was a 18.4 percent growth rate in business investment in new equipment and software in the third quarter. That was even stronger than the 15.4 percent pace previously estimated for the quarter and up from a 8.3 percent pace in the second quarter. Spending on residential projects grew at a whopping 22.7 percent pace in the third quarter, also better than the sizable 20.4 percent growth rate first estimated and up from a 6.6 percent pace in the second quarter. Why is this relevant to the WoT? A strong economy is always an important component in the minds of most Americans when they vote. It’s amazing to me that in two years since 9/11 we’ve bounced back so fast. Let’s pray this trend continues. |
| Posted by:Jarhead |
| #13 Economic questions that this thread triggers for me : A. When investment money flows out of a company like AOL into a company like Grainger isn't that better for the economy? B. With the economy on fire, won't we be able to afford new entitlements like this perscription drug thing, but isn't that what California thought about their growth of entitlements when things were good? C. If the tax rate goes down, won't some duel income families become single income families again boosting charities in need of volunteer workers? |
| Posted by: Super Hose 2003-11-25 8:14:26 PM |
| #12 Why do marxists think they're such experts on a market economy? Now that... was cold. |
| Posted by: Shipman 2003-11-25 7:09:03 PM |
| #11 Why do marxists think they're such experts on a market economy? |
| Posted by: commo 2003-11-25 6:54:44 PM |
| #10 employment is always going to lag behind the other numbers. The jobs are coming. Look for good jobs numbers beginning of the year. |
| Posted by: Swiggles 2003-11-25 5:08:21 PM |
| #9 but employment is recovering. 300K jobs have been recently added The following are Steve Antlers points (econopundit). So far, he has been dead on. -- The payroll survey shows 126,000 payroll jobs were added in October. We also learned today that payroll jobs have actually increased three months in a row. In today's report, the payroll survey was revised from a decrease in jobs to an increase in jobs for September (now +125,000) and August (now +35,000). -- The unemployment rate dropped from 6.1% to 6.0%. -- The household survey reported 441,000 jobs were added in October (the unemployment rate is based on the household survey). -- According to the household survey, total employment is now at the highest level in U.S. history. Surpassing the high set in January 2001, right before the recession, total employment is now 138.014 million jobs. -- The service sector added 143,000 payroll jobs, led by the health sector. Manufacturing lost 24,000, continuing a multi-year downward trend. This is essentially the only bad news in October employment report. -- The disparity between the payroll and household employment surveys broadened in today's report. While the payroll survey reports a decline of roughly 750,000 payroll jobs since the end of the recession in November 2001, the household survey still reports nearly one and a half million newly employed workers since then. Hiryu (the floating dragon), Give that meme titled "jobless recovery" a rest. It's done |
| Posted by: capt joe 2003-11-25 5:05:55 PM |
| #8 I wouldn't get too excited just yet, if you pump enough electricity into a corpse you'll get a pulse too. When employment recovers I'll be more impressed. Even then, this reminds too much of the '72 election. Yeah, Nixon bought his election, for all the good it did him. |
| Posted by: Hiryu 2003-11-25 4:47:18 PM |
| #7 Maybe the tax cuts had some affect on people putting money back into circulation in direct contrast to Dick Gephardt's recent comments.... |
| Posted by: Jarhead 2003-11-25 12:57:30 PM |
| #6 9/11 was a multi-billion dollar loss. We've had to make some drastic changes in the way we operate in this country (Homeland security et. al.), and we STILL have a significant rebound of the economy. Sounds good to me! Also sounds like the wailing and gnashing of teeth at the DNC will continue, and only increase in volume. The whine about 2.3 million jobs lost is an indirect jab at NAFTA and other trade agreements, when the real culprit is the imponderable weight of environmental and social regulation the Democratic Party has placed on the backs of business. We're fighting a two-front war here: one against Islamofascist terrorists, and the other against the PC culture/envirofascist terrorists in our own country. We're doing pretty well against the first, but haven't even acknowledged the second as an enemy yet. THEY, rather than the Islamofascists, will probably be the ones that end up destroying this nation, and they'll do it from within. |
| Posted by: Old Patriot 2003-11-25 12:50:14 PM |
| #5 They've based their plans on bad things happening, they cheered every lost job and dead GI (rall, chomsky, krugman). Now they're being completely exposed and discredited on every front. As soon as things start looking up, they have nothing. That's what the DNC gets for handing the party over to leftist scum and radicals. |
| Posted by: commo 2003-11-25 12:45:58 PM |
| #4 hmmm, let's see. bursting of the dot-com bubble, stock market crash, bloated state budgets drunk from surpluses, 9-11, decimation of travel, tourism & airline industries, war in Afghanistan, war in Iraq... two years later - 'the economy ROARED ahead' I'd say that's pretty goddam impressive. |
| Posted by: eyeyeye 2003-11-25 12:45:23 PM |
| #3 Democrats, however, blame Bush for the loss of 2.3 million jobs since he took office in January 2001 and argue that the tax cuts contributed to the record 2003 budget deficit. Of course the Dot-com burst has nothing to do with the job loss and the tax cut has nothing to do with the current GDP surge and econ. recovery (unless its a Donk president...). |
| Posted by: CrazyFool 2003-11-25 12:16:43 PM |
| #2 .16% of the revision was a smaller decrease in inventories than previously assumed. So our revision in true growth was only .84% better, not a full 1% ;) |
| Posted by: Damn_Proud_American 2003-11-25 11:55:33 AM |
| #1 That loud sound your hearing is the air coming out of the Democratic party. HA HA HA HA HA! |
| Posted by: Cyber Sarge (VRWC CA Chapter) 2003-11-25 11:53:02 AM |