Booming Economic Growth under Bush

Economy Grows at Fastest Pace Since 1984

Oct 30, 11:33 AM (ET)

By JEANNINE AVERSA

(AP) The economy grew at a blistering 7.2 percent annual rate in the third quarter in the strongest pace...

WASHINGTON (AP) - The economy grew at a blistering 7.2 percent annual rate in the third quarter in the strongest pace in nearly two decades. Consumers spent with abandon and businesses ramped up investment, compelling new evidence of an economic resurgence.

The increase in gross domestic product, the broadest measure of the economy's performance, in the July-September quarter was more than double the 3.3 percent rate registered in the second quarter, the Commerce Department reported Thursday.

The 7.2 percent pace marked the best showing since the first quarter of 1984. It exceeded analysts' forecasts for a 6 percent growth rate for third-quarter GDP, which measures the value of all goods and services produced within the United States.

"This is a gangbuster number. Everything came together for the economy in the third quarter," said Mark Zandi, chief economist at Economy.com. "The key challenge now is jobs," he said.

(AP) The economy grew at a blistering 7.2 percent annual rate in the third quarter in the strongest pace...

Full Image

On Wall Street, stocks were mixed. The Dow Jones industrials were down 2 points, while the Nasdaq was up 2 points in morning trading.

President Bush's spokesman, Scott McLellan, told reporters aboard Air Force One en route to Columbus, Ohio, that "today's numbers are another positive sign" that the president's strategy for boosting the economy by cutting taxes "is working, getting more money into people's pockets."

"While the economy is moving in the right direction, because of the actions that we have taken, there is more work to be done," McLellan said. "We need to contine to act and build upon the steps we have taken to get our economy growing so we can continue to translate growth into job creation."

The economy's recovery from the 2001 recession has resembled the side of a jagged cliff; a quarter of strength often has been followed by a quarter of weakness. But analysts are saying that pattern could be broken, considering increasing signs the economy finally has shaken its lethargy and is perking up.

Near rock-bottom short-term interest rates, along with President Bush's third round of tax cuts, have helped the economy shift into a higher gear during the summer, economists said. The next challenge is making sure the rebound is self-sustaining, they said.

(AP) After posting a decline in September, the Conference Board's Consumer Confidence Index jumped to...

Full Image

Democrats, however, argue that the tax cuts contributed to a record budget deficit in the recently ended 2003 fiscal year and have done little to spur significant job growth.

"This has largely been a jobless recovery," said Sen. Kent Conrad, D-N.D.

Although the nation's payrolls grew by 57,000 in September - the first increase in eight months - the economy needs to add a lot more jobs than that each month to drive down the 6.1 percent unemployment rate, analysts have said.

The administration has argued that as economic growth improves, meaningful job creation will follow. Bush will be counting on that as he heads into the 2004 presidential election season.

In other encouraging economic news from the Labor Department, new claims for unemployment benefits last week dropped by 5,000 to 386,000, a sign that layoffs are slowing. U.S. workers' wages and benefits went up by 1 percent in the third quarter, up slightly from a 0.9 percent increase in the previous quarter.

(AP) New-home sales edged down in September but nevertheless registered their third-highest level on...

Full Image

Economists believe the economy will grow at a slower - but still healthy - 4 percent rate in the final quarter.

In the third quarter, consumers ratcheted up their spending at a brisk 6.6 percent annual rate. That was the biggest increase since the first quarter of 1988 and was up from a 3.8 percent pace in the second quarter.

Consumers in the third quarter spent lavishly on big-ticket items, such as cars, boosting such spending by a whopping 26.9 percent rate. And, they also spent briskly on "nondurables" such as food and clothes, which grew at a 7.9 percent pace, the strongest showing since the first quarter of 1976.

While consumers have been the main force keeping the economy going, there are more signs that businesses are starting to do their part.

Especially encouraging was the 15.4 percent growth rate in spending by businesses on equipment and software in the third quarter. That marked the largest increase since the first quarter of 2000 and was up from a 8.3 percent growth rate in the second quarter.

Sustained turnarounds in capital spending and in hiring are crucial to the economy's return to full throttle. Economists said business wants profits to improve and wants to be sure of the recovery's vigor before it goes on a spending and hiring spree.

The red-hot housing market, powered by low mortgage rates, also contributed to the strong showing on third quarter GDP. Investment on residential projects grew at a 20.4 percent rate, the biggest increase since the second quarter of 1996, and more than three times the 6.6 percent growth rate seen in the second quarter.

Federal government spending, which grew at a 1.4 percent rate, was only a minor contributor to GDP in the third quarter. Spending on national defense was flat. But in the second quarter, military spending on the Iraq war - which grew at a whopping 45.8 percent rate - helped to catapult economic growth.

A better trade picture in the third quarter also contributed to GDP growth.

RE: Phony Economic Growth under Bush

These numbers are hoaxes. Bush needs some good news so badly that he will stoop to anything to get it. The pressure to fudge these figures must have been enormous.

RE: Phony Economic Growth under Bush

Gee, we had a non-existent surplus in the beginning of 2001 but that was not hoax. Now we have a booming economy and that is a hoax. Quelle surprise!!

RE: Phony Economic Growth under Bush

Let's see, Bush took the economy into the toilet and now the water is starting to come back. Kind of like emptying a lake, adding a bunch of water back to it and then saying the level of water in the lake has risen more this year than any other.

RE: Phony Economic Growth under Bush

>Let's see, Bush took the economy into the toilet . . . .

Yes, he certainly did. The terrorist attacks of 9/11; the collapse of the Internet economy; and the destruction of confidence in the capital markets due to corporate ethics scandals had no effect on the economy at all.

It was all Bush's doing in the 10 months he was in office.

Are you really THIS dumb?

RE: Phony Economic Growth under Bush

Apparently you are. If you take out the expense of 9/11, Bush has increased government spending more than Bill Clinton ever dreamed of. But of course, stupidity is your specialty.

(from the New York Times)

"Faced with the prospect that the strong growth figure would undermine their campaign theme that Mr. Bush has the worst economic record of any president since Herbert Hoover, Democrats sought to focus attention on what they said were two of the administration's greatest political vulnerabilities.

"One, they said, is that the upturn in economic activity has not yet translated into new jobs to offset those lost since Mr. Bush took office. Depending on what measure is used, the economy has shed 2.6 million to more than 3 million jobs since January 2001.

"The other point, Democrats said, is that the surge in growth was a result of an unsustainable tax-cutting binge that mostly benefited the wealthy and drove the budget deficit to levels that will bedevil the nation for decades. Persistent large deficits, Democrats said, could undermine the expansion down the road by forcing interest rates higher and limit the nation's ability to address long-range problems like those with Social Security and Medicare."

I hate to admit that my government has managed the economy well, but the awful truth (for me at least) is that the stand-out economy in the western world since 1996 has been Australia. We have had budget surpluses in almost every one of those years, taxes have remained relatively static, and for part of the period (during the Asian economic collapse) we were about the only economy in the OECD to continue to post economic growth. Indeed, we have had something like 6 years uninterrupted economic growth, right through the Asian crisis, 9/11 and SARS.

The moral of the story seems to be that if you have a truly balanced budget, you can generally weather most economic storms better than your neighbours. Hence, Bush's economic policy is not good for America in the long term, producing occasional blips of good news but generally blighting the country with increasing debt and eventually unsustainable trade deficits.

This goes against everything I grew up with, and I choke in having to admit that my arse-licking toadying government has done something right, but....good economic management seems to require a serious effort to make sure the national budget is balanced. On that score, then, Bush is a dismal failure.

Booming Growth

>Economy Grows at Fastest Pace Since 1984

>

>"This is a gangbuster number. Everything came together for the

>economy in the third quarter," said Mark Zandi, chief

>economist at Economy.com. "The key challenge now is jobs," he

>said.

>

Former Gov. Bush can actually take credit for the creation of numerous employment positions during this "jobless recovery." Unfortunately, this positions are all in India and China.

Oops! Consumer Spending Takes a Dip!

Consumer spending takes dip

Cautionary note ends week filled with hope

Michael E. Kanell - Staff

Saturday, November 1, 2003

One day after reports that consumers powered the economy to a late-summer surge came a note of caution that they could run low on spending power.

The 1 percent drop in disposable income reported for September and the 0.3 percent dip in spending could be the signs that the recovery can no longer depend on consumers.

The tide of tax rebates and refinancing for low-rate mortgages helped pace the economy to third-quarter growth of 7.2 percent, the government said Thursday. But the tide has turned and apparently eroded consumer spending, which accounts for two-thirds of the economy.

"The September numbers are really troubling," said economist and forecaster Michael Donihue of Colby College in Maine.

Economic growth --- as measured by gross domestic product --- last quarter reached its fastest pace in 19 years. That news fed hopes that the torpid recovery had finally been sparked into high gear.

The broader numbers Friday seemed encouraging: American incomes in September were 3.2 percent higher than a year earlier, and they grew 0.3 percent during the month.

Buoyed by a rising stock market and generally good economic news, consumer confidence in October ticked up from September, according to the University of Michigan survey released Friday.

But long-term, consumer confidence depends on a robust job market --- and the apparently stunning expansion of the third quarter has not yet translated to job growth, Donihue said.

"It will be very interesting to know what happened in October to jobs --- whether there was a lagged hiring from the third quarter."

Friday's report was the first cautionary sign that spending decelerated just as it did after the tax rebate checks of 2001 had been cashed. That parallel is worrisome: The economy then managed a burst of speed, only to drift back toward neutral as job losses continued.

To break the cycle, companies must hire. And while many see improved sales, companies hold back on hiring because they are awash in uncertainty, said economist Campbell Harvey of Duke University's Fuqua School of Business.

Yet after seeing previous false starts, their hope is outweighed by international tensions, the approaching U.S. elections, and the large trade and budget deficits, he said.

"They fear the downside more than they perceive gain from the upside," said Harvey. "What could change that is a sustained period of stability. And that is what we want --- sustainability."

Growth in the current quarter will be less than half the last quarter's 7.2 percent pace, Harvey said. "It is just not going to make much of a dent in the job situation."

Optimists hope that the rush of spending last quarter has sparked continued growth that will mean substantial hiring during the next few months, but it's not visible yet.

September saw job growth of 57,000, breaking a seven-month skein of losses, and Goldman Sachs economist Andrew Tilton on Friday predicted the economy will add just 75,000 jobs in October. That is still only about half what is needed to cut the unemployment rate, economists say.

But it may be that September was just a lull between the late-summer spending and the holiday retail binge. Companies reported extremely low inventories --- which could mean lots of hiring as they meet orders over the next few months.

And some say hiring has begun.

For instance, the interest in hiring out-of-work professionals is picking up, said Sarah Douthitt of Right Management Consultants in Atlanta, a placement and counseling company.

"The amount of job leads I am getting from recruiters who are in urgent mode --- this is a lot more volume than I'm used to," Douthitt said. "I have been in this job since the economy tanked in 2001. I have never seen it like this."

http://www.ajc.com/saturday/content/epaper/editions/saturday/business_f33ac40a94e791ca1071.html

RE: Oops! Consumer Spending Takes a Dip!

I predict that the 7.2% figure will be quietly corrected after the news fades. Suuddenly they will disocver that it was a lot lower and the story will be buried on page 42 in the lower right-hand corner.

Two things.

First, isn't it true that the same quarter that saw this remarkable spurt of economic growth also saw a NET LOSS of jobs?

Second, isn't it odd that in each of the last four weeks the media has reported a decline in first-time unemployment claims, and in each case the "decline" was subsequently revised downward -- but without the same publicity given the original story? What an odd coincidence!

Oh yes, one other thing. Does anyone recall that some months ago we had another quarter in which economic growth shot up to an annual rate of more than 5 percent? And then what happened? Did the economy recover? Was the net loss of jobs under this administration reversed?

Krugman had a great Op-Ed piece in the Thursday(?) NYTimes, he called Bush the 'One Quarter Wonder'.

The title of this thread gets me hot. I love things that grow under a bush. }(

Does that include vaginas?

>Does that include vaginas?

Dicks grow; vaginas drip.