From AP via The New York Times:
The economy picked up speed in the summer, growing at a brisk 3.9 percent pace, the fastest in 1 1/2 years and an impressive performance even as a credit crunch plunged the housing market deeper into turmoil.
The latest snapshot of the country's economic health, released by the Commerce Department on Wednesday, suggested that the economy is demonstrating much resilience and thus far holding up well to the strains in the housing and credit markets, which had intensified during the third quarter and rocked Wall Street.
Individuals ratcheted up their spending. U.S. businesses sold more goods abroad and boosted some investment at home. Those were some of the main factors helping to push up overall economic activity in the July-to-September quarter.
The third quarter's growth rate was up slightly from a 3.8 percent pace logged in the second quarter. It marked the strongest showing since the first quarter of last year.
The increase in third quarter gross domestic product exceeded analysts' forecasts for a 3.1 percent growth rate for the period. Gross domestic product is the value of all goods and services produced within the United States and is considered the best barometer of the country's economic fitness.
Consumers, whose spending is an important ingredient for the economy's good health, actually rediscovered their appetite to spend in the third quarter. Their spending rose at a 3 percent pace, a considerable improvement from the second quarter's rather weak 1.4 percent growth rate.
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2 comments:
Who is doing all this buying and what is this spending for? Was it school supplies? Is it teens?
My point is.. in the previous story it talks of failing consumer confidence which leads to less spending. Is it cash or credit spending? This administration has played with these reports before. we see massive layoffs and then a strong jobs growth report. It does not make sense.
I, too, am curious about these numbers, Thomas. I understand that the weak dollar increased exports, accounting for some of the increase in production, but I'm not convinced that would be enough to push GDP to 3.9%, which is a very solid increase. I will wait to see what the adjusted GDP figures are when they are released to see if they are revised downward toward a more expected lower number. For now, I can only scratch my head and wonder like you are as to where did all of the spending come from.
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