Thursday, July 31, 2003

Economy pissed off, ready to kick ass

Filthy Lucre

Yahoo is showing a report that the economy is surprising the economic powers that be with its health.

US economic growth shot to an annual pace of 2.4 percent in the second quarter, shattering sluggish expectations.

Defying forecasts for growth closer to 1.5 percent, the US economy gave the clearest sign yet it is shaking off Iraq (news - web sites) war-inspired shock and gathering speed, with business investment finally back.

The return in business investment, a 52-year record surge in defense spending, robust consumer spending, and a red-hot housing market powered growth, early Commerce Department (news - web sites) estimates showed.

Other good news included:

Gross domestic product, which had grown at a sickly 1.4-percent pace in the first quarter, appeared to be responding to a double dose of tax cuts and 45-year record low interest rates.

Businesses, long cowed by the Iraq war uncertainties, lifted non-residential fixed investment by 6.9 percent, with spending on structures such as factories up by a 43-year high of 4.8 percent and equipment/software expenditure up 7.5 percent.

“The economy truly does look to be on the mend,” said Naroff Economic Advisors president Joel Naroff, noting that investment in buildings had climbed for the first time since 2001.

Consumers stepped up spending 3.3 percent despite lingering agony in the labor market.

On the jobless front, although the jobless rate is still high, at 6.4% (still far lower than most of Europe) new jobless benefits claims dropped by 5,000.

Good news all around.


Posted by Buckethead on 07/31/03 at 07:15 PM
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