Posted: 12/23/2003 6:29:04 AM EDT
GDP Roars Ahead at 8.2 Percent in Q3
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - The U.S. economy, propelled by tax cuts and low interest rates, roared ahead at an 8.2 percent annual rate in the third quarter, the best showing in nearly 20 years, while Americans' incomes and spending both showed healthy gains in November.
The government reports Tuesday on the gross domestic product, the country's broadest measure of economic health, and personal incomes and spending provided further evidence that the economy was convincingly shaking off a prolonged period of lethargy and beginning to fire on all cylinders.
The Commerce Department (news - web sites) report that the GDP (news - web sites) grew at an 8.2 percent rate in the third quarter, propelled by a surge in consumer spending, was identical to the preliminary estimate made a month ago and represented the strongest growth since an 8.4 percent rate of increase in the fourth quarter of 1983.
In a separate report, the government said consumers were remaining active in the current quarter with consumer spending rising by 0.4 percent in November, the best showing since August, and incomes, helped by rising employment levels, posted an increase of 0.5 percent last month, the best gain since May.
Many analysts believe that GDP growth in the current quarter could well top 5 percent, representing the best back-to-back growth rates since the boom years of the 1990s.
The economy began the year growing at much slower rates of 2 percent in the first quarter and 3.1 percent in the second quarter before the jolt from a new round of tax cuts propelled consumer spending in the third quarter.
Growth has also been helped this year by the Federal Reserve (news - web sites)'s decision to keep a key interest rate at the lowest level in 45 years, providing strength to such interest rate-sensitive sectors as housing and auto sales.
All of the GDP figures released Tuesday reflected a comprehensive revision that the government does every five years to make sure the measurement of total output keeps up with the times. With the changes, the GDP grew by 2.2 percent for all of 2002, down slightly from the previous estimate of 2.4 percent.
The benchmark revisions and the changes to third quarter GDP showed a number of crosscutting revisions that basically offset each other to make little impact on the bottom-line number.
For the third quarter, consumer spending was revised up to an even-stronger 6.9 percent rate of growth, the best showing since the third quarter of 1986, compared to last month's estimate of 6.4 percent.
But private investment, which covers housing construction and business spending on plants and equipment, was revised down to a 14.8 percent rate of increase, reflecting slightly less business investment which offset a bigger increase in housing construction.
Even with the strong growth, inflation remained under control with a price gauge tied to the GDP rising at an annual rate of just 1.8 percent in the third quarter.
The monthly incomes and spending report showed that 0.4 percent November jump in consumer spending, which accounts for two-thirds of total economic activity, followed a tiny 0.1 percent rise in October and no change at all in September. However spending had soared by 0.9 percent in August, reflecting the burst of activity spurred by the tax cuts which went into effect in July.
The 0.5 percent rise in personal incomes followed much smaller increases of 0.2 percent in October and 0.3 percent in September. The strength last month came from a big wages and salaries, which rose by $16 billion in November compared to an October gain of $8.2 billion.
After an extended period of layoffs, employers have begun adding workers to their payrolls, which should help bolster incomes even more in coming months.
The Demos chock it up to the Holiday season spool-up.
....and the retailers are crying poor.
8.2% Growth democraps must be crying in their beer
Real Demos don't drink beer, only white wine.
To them, it is a JOBLESS recovery. Nothing to see here.
[b]libview (24 posts)
43. I hate to say this, but we need a tanking economy and
higher unemployment if we are going to stand a chance in "04"
The media has to start telling the truth and stop talking up the economy.[/b]
head_banger (10 posts)
Response to Reply #43
54. Your 100% Right
We need bush to fail because bad news for bush IS GREAT NEWS FOR OUR PARTY! I hate to think about the familes that may suffer if too many jobs are lost.
[b]TruthIsAll (1000+ posts) Tue
95. Take THIS back to all your readers.
WE do not WANT to see any additional CHAOS than that which has already been caused by BushCo.
He has ALREADY failed miserably, whether or not jobs are created and whether or not the DOW goes back up to 11,000.
The damage has already been done, not only to our unemployed and seniors, but also our children who will have to contend for years to come with the financial, economic and environmental effects of this illegal, out-of-control, fascist regime.v[/b]
TruthIsAll (1000+ posts) Tue Dec-23-03 02:21 AM
Response to Reply #16
99. It's all smoke and mirrors, a house of cards which will collapse.
Edited on Tue Dec-23-03 02:29 AM by TruthIsAll
Like when they claim unemployment grew in a given month by ONLY 395,000. That's under the magic 400,000, so it's great news. Really.
CNBC constantly shills the Bush economic "recovery". But they don't talk about exploding deficits, the sinking dollar vs. the rising Euro, Russia and China and Saudi Arabia probably going to the Euro currency, increased total unemployment, rising gold and energy prices, bankrupt states and municipalities, all-time record foreclosures and bankruptcies, small businesses dying, foreigners taking our jobs, full-time salaries and consultant compensation cut, interest rates inevitably going up (and you know what this means for the markets), Warren Buffet, Bill Gross and Soros all bearish.
This is good economic news? Like everything else from Bush, it's a PR gimmick, a series of lies, mistatements and... a form of looting, as that 2001 Economic Nobel prize winner wrote.
[red]Ah, there's that message of hope we all know and love about Democrats.[/red]
I want to throw hot grease on those idiots.
Originally Posted By DoubleFeed:
The Demos chock it up to the Holiday season spool-up.
That would be a weak argument by the DEMS then - the 3rd Quarter is July, August and September. The only one I know of spooling up for the Holiday season at that time is my wife.
That's what is so f'ed up about the DEMS. They wish for BAD things to happen to the U.S. for them to get back in power (another BIG terrorist attack, crappy economy, lots of body bags coming back from Iraq, ect.) It is treasonous, plain and simple.
The Dems are praying that Allah send his warriors to strike the Great Satan and defeat GWBush.
The liberals are liking this news about as much as Macaulay Culkin enjoyed the forced sponge baths he got from MJ.
Now the Dims will start screaming about inflation.