10-30-2003, 08:11 AM | #1 (permalink) |
Junkie
Location: NJ
|
Damned slow economy. Only grew at a 7.2% rate in Q3!
http://money.cnn.com/2003/10/30/news...ex.htm?cnn=yes
GDP growth surges 7.2% Broadest measure of economic growth at strongest pace in 3Q since first quarter of 1984. October 30, 2003: 10:32 AM EST NEW YORK (CNN/Money) - U.S. economic growth surged in the third quarter of 2003 to the fastest pace in nearly two decades, the government said Thursday, in a report that was much stronger than most economists expected. Gross domestic product (GDP), the broadest measure of economic activity, grew at a 7.2 percent annual rate in the quarter after growing at a 3.3 percent rate in the second quarter, the Commerce Department reported. Economists, on average, expected GDP growth of 6 percent, according to Briefing.com. "This is obviously an extraordinarily strong report, led by the consumer, but also with good signs about the state of the business sector and business confidence," said Lehman Brothers economist Drew Matus. The burst of GDP growth was led by a 6.6 percent growth rate in consumer spending, the fastest pace since 1988. Consumer spending grew at a 3.8 percent pace in the second quarter. Child tax credit checks and lower rates of income tax withholding helped fuel the third-quarter spending surge, enabling the Bush administration -- which pushed for tax cuts earlier this year -- to take a victory lap Thursday morning. "Today's report on real GDP in the third quarter shows that the president's economic policies are having a positive impact on the economy," Treasury Secretary John Snow said. But U.S. stocks fell in early trading after the report, the strength of which was already expected by many traders. Treasury bond prices also fell, pushing interest rates higher, since bond yields and prices move in opposite directions. Still few jobs Many economists expect the impact of the tax cuts to fade in the fourth quarter, and the cash flow from mortgage refinancings, another boon to third-quarter economic growth, is expected to diminish as well. As a result, most economists expect a slower pace of GDP growth, about 4 percent, in the fourth quarter. A decline in business inventories in the third quarter, however, could mean GDP will get a boost in the fourth quarter, if and when businesses re-stock their shelves. "The plunge in inventory accumulation does suggest that firms are not confident enough to add merchandise to their shelves," said Anthony Chan, chief economist at Banc One Investment Advisors. "But they will not be able to do this indefinitely because everyone knows that sporting empty shelves in an rising growth environment is not prudent." In a separate report, the Labor Department said new weekly claims for unemployment benefits were still relatively high in the week ending Oct. 25, pointing to the Achilles' heel of the strengthening economy: a sluggish job market. In fact, during a quarter with the strongest growth rate since 1984, non-farm payrolls shed a total of 41,000 jobs, according to Labor Department statistics, in part because of strong productivity growth, which enables companies to get more work out of fewer workers. But job growth is typically a lagging economic indicator, and most economists hope that continued strong demand will eventually catch up with the recent gains in productivity and lead to sustained job growth. "Since no new jobs were generated in the third quarter, the growth story is entirely based on productivity," said Bill Cheney, chief economist at John Hancock Financial Services in Boston. "The good news for workers is that productivity growth cannot continue at this pace. Demand will translate into jobs very soon, and in fact I think it's happening right now." "But that's still largely a hope, not a certainty," Cheney added. Cars, homes lead the charge Much of the strength in consumer spending in the third quarter was in durable goods, items meant to last three years or more, and much of that strength was in sales of motor vehicles and parts, which alone contributed 1.17 percentage points to the total pace of GDP growth. Record home sales also contributed to GDP growth in the quarter; residential investment boomed to a 20.4 percent annual pace, compared with 6.6 percent in the second quarter. Residential investment contributed nearly a full percentage point to the total GDP growth rate. Nonresidential fixed investment rose at a 11.1-percent annual rate, following the second quarter's 7.3 percent pace, a sign of continuing strength in business spending. Investment in equipment and software rose at a 15.4 percent pace, compared with 8.3 percent in the second quarter. Spending on equipment and software contributed 1.18 percentage points to the total GDP growth rate. Weakness in imports -- which subtract from GDP, since they represent goods and services bought from other nations -- also helped total GDP growth. Imports grew at just a 0.1 percent pace in the quarter, while exports surged at a 9.3 percent growth rate. Government spending, which contributed mightily to the second quarter's growth rate, slowed down. Defense spending, which grew at a 45.8 percent pace in the second quarter, driven by spending on the war in Iraq, was flat in the third quarter. The personal consumption expenditure price deflator, an inflation measure closely watched by the Federal Reserve, rose to 1.7 percent from 1.0 percent in the second quarter. The Fed recently left its target for its key short-term interest rate unchanged at levels not seen consistently since 1958, saying the recent surge in economic growth had not changed its outlook for inflation. The Fed has maintained for several months that it is worried about inflation getting too low, which could hurt corporate profits and economic growth. "We believe that the Fed will require both consistent solid hiring and a rise in inflation before it begins to lift rates," said UBS Warburg chief economist Maury Harris. Would be nice if a few other sectors (unemployment for example) would pick up a bit more. But overall an impressive showing from the consumer. Last edited by onetime2; 10-30-2003 at 08:14 AM.. |
10-30-2003, 08:23 AM | #2 (permalink) |
Super Agitator
Location: Just SW of Nowhere!!! In the good old US of A
|
I'm sure that the only reason for this growth is a result of the many fine candidates vying for the Democratic nominations continued efforts to inform the American people of how bad things really are. If it goes up a few more points I am sure that many will tell you that this is most definitely grounds to start an immediate recall petition to get rid of the current administration before uncontrolled growth gets our econoimy into such a mess that they have absolutely nothing left to bitch about.
__________________
Life isn't always a bowl of cherries, sometimes it's more like a jar of Jalapenos --- what you say or do today might burn your ass tomorrow!!! |
10-30-2003, 08:28 AM | #3 (permalink) |
Pissing in the cornflakes
|
I'd give 2 weeks pay to know what the 9 dwarves REAL reaction to this news was.
I knew the economy was getting better at least locally. Its been a shopping frenzy out here for the last few months. At the Oak Brook mall, one of the best malls in the US for quality stores, I had to park out in the outter rows of parking where you normally never have to park unless its almost Xmass. Stores like best buy and the like were total zoos as well. Obviously this is all anecdotal, but it is amusing in light of the new numbers.
__________________
Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. |
10-30-2003, 08:31 AM | #4 (permalink) | |
Junkie
Location: NJ
|
Quote:
|
|
10-30-2003, 08:50 AM | #5 (permalink) |
Psycho
Location: Just outside the D.C. belt
|
With tongue planted firmly in cheek...... since the economy of the Clinton era was the result of the Raygun/Bush the Elder's planning (according to some) then this coming boom (-cough-) has to be the work of Clinton. Correct?
2Wolves |
10-30-2003, 09:12 AM | #7 (permalink) | |
Pissing in the cornflakes
|
Quote:
__________________
Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. |
|
10-30-2003, 09:37 AM | #8 (permalink) |
Banned
Location: norway
|
Jesus this is ridicolous. Conservatives and Democrats never stop arguing who's president rescued and who destroyed the economy, and noone can prove a thing. It is all word agains word. Could we just declare this a none-issue? Until someone is able to come up with undeniable proof, can't we all just call it a draw, and skip the entire political pissfight where noone wins? Just be glad that the economy is on the rise, don't try to spin it either way.
|
10-30-2003, 09:47 AM | #10 (permalink) | |
Psycho
Location: Just outside the D.C. belt
|
Quote:
2Wolves |
|
10-30-2003, 09:52 AM | #11 (permalink) | |
Pissing in the cornflakes
|
Quote:
__________________
Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. |
|
10-30-2003, 10:15 AM | #14 (permalink) | |
Junkie
Location: NJ
|
Quote:
As far as it being a non-issue, I wish it were possible but the party not in power will always try to spin the economy as the fault of those in power. |
|
10-30-2003, 10:42 AM | #17 (permalink) | |
Junkie
Location: NJ
|
Quote:
|
|
10-30-2003, 10:44 AM | #18 (permalink) | |
Apocalypse Nerd
|
Are we reading the same article?
Moderater please forgive me as I repost a paragraph or two that many here seemed to have skipped Quote:
|
|
10-30-2003, 10:46 AM | #19 (permalink) | |
Psycho
Location: Just outside the D.C. belt
|
Quote:
2Wolves |
|
10-30-2003, 10:51 AM | #20 (permalink) | |
Pissing in the cornflakes
|
Quote:
*gasp* how horrible.
__________________
Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. |
|
10-30-2003, 11:07 AM | #21 (permalink) | |
Junkie
Location: NJ
|
Quote:
Meeting the needs of a moderately growing economy can be accomplished in the short-term with current employment levels but to meet the demands of a fast growing economy, more workers will be needed. As far as your outlining of the word "hope" well there are no guarantees in economic forecasting. |
|
10-30-2003, 11:18 AM | #23 (permalink) | |
Apocalypse Nerd
|
Quote:
Many American companies, (like my student loan company for instance: Sallie Mae), have outsourced their customer service to India. I can see that this is monetarily good for them and could lead in a rise of profits. However, this doesn't necessarily mean that everything is good for those outsourced American workers. I'm not a protectionist but don't quote numbers until the American people see results. (And if one person on here or another is reaping the benefits of the Jobless recovery... go ahead and gloat a little... But don't expect everyone here to find your argument so convincing). |
|
10-30-2003, 11:24 AM | #24 (permalink) | |
Junkie
Location: NJ
|
Quote:
As far as outsourcing jobs. Nothing new. It's been done to countless other industries. That's the nature of allowing foreign trade and selling public shares of companies. The stockholders want costs to be lowered. It's certainly not the President's fault that you chose the wrong profession. As far as quoting numbers before the "American people" see the results, you were the one clamoring for quotes in the other economic posts and just because you don't like this one, you want to disregard it. The majority of the American people are seeing the results. That's why they're spending their money. That's why they're buying new houses and new cars and investing in the stock market. Last edited by onetime2; 10-30-2003 at 12:19 PM.. |
|
10-30-2003, 11:44 AM | #26 (permalink) | ||||
Apocalypse Nerd
|
Quote:
Thanks for the flame. Quote:
When did I even bring up the President in this thread? Quote:
http://www.ohio.com/mld/ohio/business/6959927.htm Quote:
|
||||
10-30-2003, 12:02 PM | #27 (permalink) | |
Junkie
Location: NJ
|
Quote:
Interesting that your argument has now shifted to consumers borrowing too much when you down played the consumer impact in every other economic discussion we've had. If you want to look at consumer debt you need to look at the other side of the balance sheet and look at their assets. While debt has risen (as I've discussed in our other posts) the values of their homes and stock portfolios have risen faster. Go ahead and try to spin the 7.2% growth into a bad thing, no one will buy it. The consumers are buying because they're confident. If they weren't confident they wouldn't spend, even if interest rates were low. Check out Japan's interest rates and their level of consumer spending while money was virtually free over there. Without the consumer the economy is nothing. Last edited by onetime2; 10-30-2003 at 12:28 PM.. |
|
10-30-2003, 12:51 PM | #28 (permalink) |
Pissing in the cornflakes
|
Who wants to bet the tilted left would be saying how horrible Bush was had the figures been reversed
This is basicly a 'haha' moment.
__________________
Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. Last edited by Ustwo; 10-30-2003 at 01:33 PM.. |
10-30-2003, 01:21 PM | #29 (permalink) | |
Apocalypse Nerd
|
Quote:
|
|
10-30-2003, 01:32 PM | #30 (permalink) | |
Apocalypse Nerd
|
Quote:
|
|
10-30-2003, 01:34 PM | #31 (permalink) | |
Pissing in the cornflakes
|
Quote:
BTW, HAHA, Bush is going to win in 2004.
__________________
Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps. |
|
10-30-2003, 01:57 PM | #32 (permalink) |
Addict
Location: Chicago
|
as someone in the futures pits, i think a number that strong with no rally is quite bearish. people are getting worried that this mild bull run has been coaxed out of the market by every stimuli they could throw at it. bush's guys have thrown everything they had on the fire. time to see if the bull can stand on its own.
__________________
raw power is a guaranteed o.d. raw power is a laughin' at you & me -iggy |
10-30-2003, 02:12 PM | #33 (permalink) | |
Junkie
Location: San Jose, CA
|
On NPR today an analyst said that the growth was likely a bubble from the consumer, fueled by people receiving their one-time tax checks. The analyst doubted that the GDP growth was sustainable.
So, you basically have a one-time bubble that we have to pay for later when the bill for our record deficit comes due in the future. Here's a less rah-rah analysis of the numbers from a qualified source http://www.washingtonpost.com/wp-dyn...2003Oct30.html Quote:
|
|
10-30-2003, 02:30 PM | #35 (permalink) | |
Psycho
Location: Just outside the D.C. belt
|
Quote:
But let's take a look at it from this perspective: fewer jobs, more capital going where? Not to the middle class which is the spine of Federal government revenue. The Blunder on Terror has to be paid for in some fashion. 2Wolves |
|
10-30-2003, 02:45 PM | #36 (permalink) |
Banned
|
And the highering will start, you watch 2 Wolves, a rising economy means more work for everyone. Time to update that resume. And Blunder on terror? thats a good one, too bad most americans disagree with you, as much as you would like this nation to be soft on Terrorism issues.
|
10-30-2003, 03:38 PM | #37 (permalink) |
Junkie
Location: Toronto
|
Actually, congratulations are in order, those numbers are phenominally good.
7.2 is not sustainable, nor would you want it to be. It would eventually cause inflation, which would cause greenspan to raise interest rates to stem inflation. Give that person and US national debt is at all time record highs, any raise to the bank rate would have a rather severe impact to both those in debt and the country as a whole. But still 7.2 percent is the highest single quater rate i can remember. Congratulations are in order. But i would be happy with a nice robust 4% year after year. Now the job market needs to pick up a bit. I am a bit perplexed as to why the stock market didn't roar with approval though. Very strange. What the fuck do they want? |
10-30-2003, 04:34 PM | #38 (permalink) | |
Psycho
Location: Just outside the D.C. belt
|
Quote:
2Wolves |
|
10-30-2003, 04:54 PM | #39 (permalink) | |
Junkie
Location: NJ
|
Quote:
As for the stock market, it takes all unexpected news badly. Had it come in at the 6% rate that many had predicted it would have been off to the races. The extra has them scratching their heads and fearing a too fast economy and the Fed reaction to this growth. |
|
10-31-2003, 05:48 AM | #40 (permalink) |
Super Agitator
Location: Just SW of Nowhere!!! In the good old US of A
|
Maybe we should be greatful that the economy appears to be turning around - using what Wall St. does as a guage is no better than having an idiot do the math - Wall St. reacts to a fart and ignores hurricanes far too often. While Wall St. might reflect the views of the monied eccentrics it doesn't show a true picture of anything else. You might as well use the hot air that comes from a few of Hollywood's elite as a guage also- those idiots come as close to showing the truth about anything and everything as does the stock market - Half the time neither one of them even agrees with itself.
__________________
Life isn't always a bowl of cherries, sometimes it's more like a jar of Jalapenos --- what you say or do today might burn your ass tomorrow!!! |
Tags |
72%, damned, economy, grew, rate, slow |
|
|