Economic growth revised up

Discussion in 'Current Events' started by eric, Oct 10, 2003.

  1. eric
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    eric Guest

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    U.S. gross domestic product grew at 3.1% rate in 2nd quarter


    WASHINGTON, Aug. 28 The U.S. economy emerged from the doldrums in the second quarter of this year and grew at a solid 3.1 percent annual rate, a better performance than the government thought just a month ago.

    THE REVISED READING on gross domestic product released by the Commerce Department Thursday showed the economy picking up more speed in the April to June quarter than the 2.4 percent growth rate first estimated.
    The 0.7 percentage-point improvement to GDP reflected more military spending for the Iraq war and more robust spending by consumers and businesses than the government previously thought. The revised second quarter reading was stronger than the 2.9 percent growth rate economists were expecting and marked the economy’s best performance since the third quarter of 2002.
    The rebound came after two straight quarters of anemic economic growth. GDP, which measures the value of all goods and services produced within the United States, increased at just a 1.4 percent pace in the final quarter of 2002 and the first three months of this year.
    In a second report, new claims for unemployment benefits rose by a seasonally adjusted 3,000 to 394,000 last week, the Labor Department said. Even with the increase, claims remained below 400,000, a level associated with a weak job market. That offered hope that the pace of layoffs is stabilizing.
    After-tax profits of U.S. corporations fell by 3.4 percent in the second quarter, compared with a 3.8 percent increase in the first quarter, the GDP report said.
    The Bush administration insists the tax cuts will help the economy grow and eventually create jobs. Democrats say the tax cuts aren’t putting people back to work, mainly help the wealthy and dig the federal budget hole deeper.
    In the second quarter, surging military spending was a major factor in the strong GDP showing. Spending by the federal government on national defense increased at a whopping 45.9 percent rate, the largest increase since the third quarter 1951. The new estimate was stronger than the 44.1 percent growth rate for such spending reported a month ago.
    Consumer spending grew at a 3.8 percent pace in the second quarter, up from a 3.3 percent growth rate previously estimated. Much of that pickup reflected more brisk spending on big-ticket goods, such as cars and appliances. Consumer spending on such durable goods grew at sizable 24.1 percent rate, the biggest increase since the end of 2001.
    Consumer spending has been the main force keeping the economy going.
    Thursday’s report offered signs that businesses, whose reluctance to spend in previous quarters was a main factor in the economy’s listlessness, may be coming around.
    Businesses increased spending in the second quarter on equipment and software at an 8.2 percent pace, up from the 7.5 percent growth rate previously reported, and a turnaround from the cut in such spending made during the first quarter of this year.
    And, after six straight quarters of cutting spending on plants and other structures, businesses increased such investment in the second quarter at a 7.1 percent rate, also stronger than the 4.8 percent growth rate first estimated for the quarter.
    The nation’s trade deficit also was less of a drag on second-quarter GDP than the government previously thought. The trade deficit shaved off 1.20 percentage point from GDP, versus the 1.56 percentage point reduction first estimated.
    Amid signs of an economic rebound, the Federal Reserve earlier this month decided to hold a key short-term interest rate at a 45-year low of 1 percent and hinted that the rate may stay at this low level for some time.
    Economists are predicting that the economy will pick up speed in the second half of this year, with some estimating that growth will clock in at an annual rate of 3.5 percent or more.
    Near rock-bottom short-term borrowing costs along with fatter paychecks and other incentives coming from President Bush’s third tax cut should motivate consumers and businesses to spend and invest more, thus boosting economic growth.
    Even if the economy perks up in the second half, the job market probably will remain sluggish for a while, economists say. The nation’s unemployment rate dipped to 6.2 percent in July, but that was mainly because a lot of people left the civilian labor force. Businesses cut jobs for the sixth month in a row.
    Economists say businesses will want profits to improve and want to feel secure about the economic rebound before they go on a hiring spree.
     
  2. MtnBiker
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    MtnBiker Senior Member

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    Somehow I doubt this will be brought up at the Democratic canidate debates.
     
  3. Wry Catcher
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    Wry Catcher Platinum Member

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    Job problems during the Bush era? Tell me it isn't true.
     
  4. editec
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    editec Mr. Forgot-it-All

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    It is, of course, encouraging that some economic indicators appear to be improving.

    But until the employment picture improves, and until the American workers get to SHARE some of those improvments in the national economy, it's still going to feel like a depression to most of us.

    And since this depression is largely the result of more and more of us making less and less in terms of purchasing power, and since the mavens running our economy has YET to acknowldge that, I have my doubts that this economy is really going to mend.

    What I susepct it's going to do is CHANGE< rather than mend.

    I suspect that the percentage of the population who will be forever in the economically disadvantaged class is going to be larger than the 12.5% we've come to think of as normal.

    \
     
    Last edited: Feb 11, 2010
  5. Wry Catcher
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    Wry Catcher Platinum Member

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    Sadly I have to agree with your conclusion.
    The mavens, are they those once known as 'master's of the universe'?
     
  6. Oddball
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    Oddball BANNED Supporting Member

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    Did the OP date of 2003 get past you two necromancers? :lol:
     
  7. Wry Catcher
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    Wry Catcher Platinum Member

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    No moron, I pulled it from the archives to provide a bit of historical perspective. I have posted two other threads for similar reasons. Now go away, you make me sleeeepy...zzzzzzz.
     
  8. Oddball
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    Oddball BANNED Supporting Member

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    Yeah....Historical perspective...suuuuuuuuure. :rolleyes:
     
  9. Meister
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    Meister VIP Member Supporting Member

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    :lol::lol: I think that would be a big ooops.
     

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