Spring's economic rebound unlikely to last

Discussion in 'Economy' started by Shogun, Aug 28, 2008.

  1. Shogun
    Offline

    Shogun Free: Mudholes Stomped

    Joined:
    Jan 8, 2007
    Messages:
    30,495
    Thanks Received:
    2,224
    Trophy Points:
    1,043
    Ratings:
    +2,260
    Spring's economic strength unlikely to last given slowdowns overseas, struggling consumers

    WASHINGTON (AP) -- The economy pulled out of a dangerous rough patch in the spring, thanks largely to strong exports, but the rebound isn't expected to last. Economic slowdowns overseas could make exports tail off just as Americans are hunkering down after the bracing impact of rebate checks wanes, plunging the country into another rut later this year.

    "There will be heavy sledding for the U.S. economy during the next couple of quarters," predicted Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

    Gross domestic product, or GDP, grew at a 3.3 percent annual rate in the April-June quarter, its fastest pace in nearly a year, the Commerce Department reported Thursday. The revised reading was much better than the government's initial estimate of a 1.9 percent pace and exceeded economists' expectations for a 2.7 percent growth rate.

    The rebound followed two dismal quarters. The economy actually shrank in the final three months of 2007 and barely budged in the first quarter at a minuscule 0.9 percent pace. The 3.3 percent growth in the spring was the best performance since the third quarter of last year, when the economy was chugging along at a brisk 4.8 percent pace.

    White House press secretary Dana Perino said the numbers demonstrated the economy's resilience in the face of many challenges. But she added: "No one is doing a victory dance."

    Others agreed that the growth pickup wasn't a sign of better days ahead. Analysts predict the second quarter will represent the high point for economic activity this year.

    It's "the last hurrah for this economic cycle," said Martin Regalia, chief economist for the U.S. Chamber of Commerce.

    Federal Reserve Chairman Ben Bernanke has warned the economy will be weak through the rest of 2008. Economists believe growth will slow in the July-September quarter to a pace of around 1.5 percent, and will turn even weaker in the fourth quarter. Some, including Regalia, think the economy might jolt into reverse yet again.

    GDP measures the value of all goods and services produced within the U.S. and is the best barometer of the country's economic health.

    The economy is the top concern for Americans. Democratic presidential contender Barack Obama favors a second government stimulus package, while Republican rival John McCain supports free trade and other business measures to buttress the economy.

    On Wall Street, the GDP report lifted stocks. The Dow Jones industrials were up more than 180 points in afternoon trading.

    For months, housing, credit and financial troubles have hammered the economy.


    In turn, employers have clamped down on hiring, driving the nation's unemployment rate up to 5.7 percent in July, a four-year high. The Labor Department said Thursday the number of people signing up for jobless benefits declined last week for the third straight period, but remained above 400,000 -- an indicator of a slowing economy.

    Health care products maker Abbott Laboratories, telecommunications provider Embarq Corp., and aluminum maker Alcoa Inc. are among the companies recently announcing layoffs.

    Employers have cut jobs every month this year and wage growth is trailing inflation. That combination raises concerns about the future of consumer spending, one of the pillars underpinning the economy.

    The biggest factor in the GDP's second-quarter rebound was robust sales of U.S. exports. The weaker value of the U.S. dollar has bolstered those sales, which accounted for half of the gain in GDP. Exports grew at a 13.2 percent pace in the spring, more than double the 5.1 percent growth rate logged in the first quarter.

    Imports, meanwhile, fell at a 7.6 percent annualized pace in the spring, as economic troubles in the U.S. crimped demand for foreign-made goods. The improved trade picture added 3.1 percentage points to second-quarter GDP, the most since 1980.

    Against that backdrop, Japan's Toyota Motor Corp. on Thursday lowered its global sales target for next year, proof that even one of the world's most durable automakers is being hurt by a slowing U.S. market.

    "With the rest of the world now slowing and the dollar off its lows, the U.S. will be more reliant on domestic demand in coming quarters," said Nigel Gault, an economist at Global Insight. "Since consumer spending is slowing down and the credit crunch is tightening its grip, it is hard to foresee another quarter with such a robust GDP headline for some time."

    U.S. consumers did boost their spending at a 1.7 percent pace in the second quarter, the best showing in nearly a year. Government stimulus checks of up to $600 a person helped energize shoppers. But many expect consumers to pull back in the months ahead as unemployment rises, paychecks shrink and their biggest asset -- their homes -- continue to sink in value.

    The effects of the housing market's collapse were evident in the GDP report.

    Builders cut back at an annual rate of 15.7 percent in the second quarter-- although that was a better showing than early this year and late last year.

    Businesses trimmed spending on equipment and software in the spring. And, they reduced investment in inventories, but not as much as initially estimated by the government. That also contributed to the improved GDP reading.

    One measure of corporate profits showed companies losing ground in the second quarter. After-tax profits fell 3.8 percent in the spring, compared with a 1.1 percent increase in the first quarter.

    With the economy still coping with fallout from housing and credit problems, the Fed is expected to hold interest rates steady at its next meeting on Sept. 16, and probably through the rest of this year.

    AP Writers Christopher S. Rugaber and Ben Feller contributed to this report.


    Spring's economic rebound unlikely to last: Financial News - Yahoo! Finance


    Good job, republicans. BRAVO!

    :clap2:
     
  2. Shogun
    Offline

    Shogun Free: Mudholes Stomped

    Joined:
    Jan 8, 2007
    Messages:
    30,495
    Thanks Received:
    2,224
    Trophy Points:
    1,043
    Ratings:
    +2,260
    Of course.. MATT DRUDGE's interpretation:


    FLASH: ECONOMY REBOUNDS IN 2Q AT 3.3%; 'RECESSION' ON HOLD...


    :lol:


    TYPICAL
     
  3. glockmail
    Offline

    glockmail BANNED

    Joined:
    Aug 31, 2006
    Messages:
    7,700
    Thanks Received:
    433
    Trophy Points:
    83
    Location:
    The beautiful Yadkin Valley
    Ratings:
    +438
    Both are opinions; only the real numbers matter. The current statistics are bad news for the Democrats though, since their platform of "change" from "failed Bush economy policies" relies on actual failure of the economy, which obviously hasn’t happened. :D
     
    • Thank You! Thank You! x 1
  4. Shogun
    Offline

    Shogun Free: Mudholes Stomped

    Joined:
    Jan 8, 2007
    Messages:
    30,495
    Thanks Received:
    2,224
    Trophy Points:
    1,043
    Ratings:
    +2,260
    you wish, dogma junkie. Try reading the article this time.
     
  5. glockmail
    Offline

    glockmail BANNED

    Joined:
    Aug 31, 2006
    Messages:
    7,700
    Thanks Received:
    433
    Trophy Points:
    83
    Location:
    The beautiful Yadkin Valley
    Ratings:
    +438
    I did, and noticed that you bolded only the dire predictions and bad news, proving my point that Liberals are relying on economic failure. Oops- I hope y’all had a Plan B. :lol:
     
  6. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,617
    I suspect the economy will start crappying out in the NE as the cost of heating goes through the roof.

    I expect I'll be selling my house because I can't afford to heat it, and it's too big for me now, anyway as the boy will be moving out soon.

    A friend of my son's father will be doing likewise for pretty much the same reason.

    Putting houses on the market in the Fall when Maine has an 11 month inventory of homes. I must be nuts.

    but my story is here in Maine not a remarkable one, I think.

    Some counties here are already preparing for daytime heat shelters to help older people have a place to go in the daytime, just so they can turn down their heat and save some money. Yeah, they're that worried about it, here, folks. Winter is a killer.

    For those of you for whom the price of oil is no bid deal, you pain will come as the economy craps out from our fiscal pain.

    Money people won't be spending on other things will be missed in local economies.

    Last I heard the spot price for home heating oil was $4.00 a gallon. If I thought it was going down to $3, and going to stay there, I might think about holding on, but generally the price of heating oil goes up in season, so I expect it could see $5 before spring if things follow their normal course of supply demand.
     
  7. AllieBaba
    Offline

    AllieBaba BANNED

    Joined:
    Oct 2, 2007
    Messages:
    33,778
    Thanks Received:
    3,648
    Trophy Points:
    0
    Ratings:
    +3,650
    This is strange..I was reading economic stuff today and the articles I saw said the US dollar was looking to continue to move up, and the economic upswing was going to continue. And this was just doing random searches...not looking for information from particular sites.
     
  8. Toro
    Offline

    Toro Diamond Member

    Joined:
    Sep 29, 2005
    Messages:
    50,714
    Thanks Received:
    11,047
    Trophy Points:
    2,030
    Location:
    The Big Bend via Riderville
    Ratings:
    +25,043
    The economy is doing better than expected because net exports rose a lot and government spending remains strong.

    However, the effects of the tax rebate are ending, governments' budgets continue to deteriorate and the economy is weakening around the world while the dollar has bottomed. The economy is not going to collapse but we're probably going to zero growth for the second half of the year, if not negative.
     
  9. Bern80
    Offline

    Bern80 Gold Member

    Joined:
    Jan 9, 2004
    Messages:
    8,094
    Thanks Received:
    720
    Trophy Points:
    138
    Ratings:
    +726
    archaic as it is, I'm glad the fourplex I'm in heats off a boiler. A good option also would be to get a wood burning fireplace, they can save you tons on heating oil.
     
  10. Chris
    Offline

    Chris Gold Member

    Joined:
    May 30, 2008
    Messages:
    23,154
    Thanks Received:
    1,958
    Trophy Points:
    205
    Location:
    Virginia
    Ratings:
    +2,089
    Imagine how much better we would be doing if we had not borrowed $700 billion from the Chinese to fund the invasion of Iraq?
     

Share This Page