Economy Grows at Fastest Pace in a Year

AP via News & Observer ^ | Thursday, August 30, 2007 | Martin Crutsinger

[kristinn]

The economy grew at its strongest pace in more than a year during the spring as solid improvements in international trade and business investment helped offset weakness in housing. The gross domestic product, the broadest measure of economic health, expanded at an annual rate of 4 percent in the April-June quarter, significantly higher than the 3.4 percent rate the government had initially estimated a month ago, the Commerce Department reported Thursday.

But the growth spurt could be short-lived. There are concerns that the recent turmoil in financial markets, a result of a spreading credit crisis, could seriously dampen economic activity in the second half of this year.

GDP growth may have slowed to just above 2 percent in the current quarter and many analysts believe growth will slow even further in the final three months of this year as the full impact of the recent market turmoil is felt.

The worry is that the roller coaster ride in stocks and spreading credit problems will shake consumer and business confidence and cause cutbacks in spending and hiring plans.

However, analysts believe the Federal Reserve will act to avert a full-blown recession. If financial turmoil persists, they think the Fed will wield its major policy tool, cutting its target for the federal funds rate, the interest that banks charge each other.

SNIP

In other economic news, the Labor Department reported that the number of newly laid off workers filing for unemployment benefits rose to 334,000 last week, an increase of 9,000 from the previous week. That gain caught analysts by surprise. They had been expecting a decline of around 2,000.

[GWB00]

Paul Krugman must be bursting blood vessels.

[MNJohnnie]

Love the way the failed Media spins things when it come to economics.

Compare this article, or any article on the Economy written when Reagan was President with the coverage Clinton got.

When a Republican is in office you get this "well here is good news but now we are going to hyperventalate about why the good news really isn't good news" then under Clinton you got "well here is some so so economic news, but now we are going to gush like this is the greatest news ever in the history of the world and tell you why you should thank Clinton for it."

For example compare this article above with this one about Clinton below.

Washington Post touts low unemployment, strong economy; credits President [Free Republic FLASHBACK]

Washington Post Archives | May 4, 1996 | John M. Berry; Washington Post Staff Writers

Posted on 01/07/2006 8:14:50 AM PST by nwrep

In sharp contrast to yesterday, when the 4.9% unemployment rate was described by the MSM as “weak numbers”, the media was tripping over itself in 1996 while reporting the 5.6% unemployment under President Clinton in 1996 as evidence of a rosy economy and good policies by the administration. Below is how the Post described the news. Notice that it buried the weaker than expected payroll growth deep in the report, while yesterday it lead most of the major newscasts, which downplayed the unemployment numbers.

********************************************************

The unemployment rate dropped to 5.4 percent, its lowest level in 14 months, the government reported yesterday, capping a week of good economic news for the country — and great news for President Clinton’s reelection bid. Wages are rising at their fastest pace in five years, consumer confidence is soaring, and business and consumer spending has fueled an unexpectedly strong burst of economic growth.

[stockstrader]

Good post.

It's amazing how the public has no idea that Slick inherited an economy coming OUT OF RECESSION--and left office with the 'tech wreck' and an economy IN RECESSION. Add into those facts, the fact that Bush41 had removed Saddam Hussein from Kuwait and President Reagan presided over the US victory in the Cold War (Slick didn't have to worry about the USSR either).

Slick inherited an absolutely perfect environment (coming out of a recession with TWO major threats removed for him)--and left the US IN A RECESSION, with terrorists attacking our facilities worldwide while underfunding our intelligence agencies AND our military.

We are STILL paying for the malfeasance, dereliction of duty and reckless disregard for our security from the Clinton years. We will be paying for the malfeasance for a LONG TIME.

[mainerforglobalwarming]

Unfortunately, if the election for president were held today Mrs. Bill Clinton would win. I say this based on Ohio sadly becoming a solid blue state. Where will this nation be in 5 years? I can’t imagine a good outcome with the clintons back in charge.

[dangus]

>> The purpose of government is to stop runaway economic growth. <<

I’m checking the Constitution, the Federalist Papers, etc... no, I don’t seem to see mention of that.

[RightWhale]

I’m just reporting what I see. The business of Congress is commerce, but only of the large American Corporation kind. That is Constitutional although you have to read in between the letters like the USSC Justices.

[wallcrawlr]

haha

nice recap

[MNJohnnie]

Projected Deficit this year will be under 150 billion.

UPDATE 1-US FY07 budget deficit to drop to $158 bln - CBO

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-08-23T135309Z_01_N23247051_RTRIDST_0_USA-ECONOMY-DEFICIT-UPDATE-1.XML

[MNJohnnie]

Ummmmmmmm, How did we get from "A" to "B" here?

Because we have a Republican in the White House. AP has a formula.

If A + Republican in White House then B

If A + Democrat in White House then A++++++

[mainerforglobalwarming]

Thanks.

[BenLurkin]

Look for a pull back in equities when the Fed does not cut rates on the 18th.

[Red Boots]

Just as the Kennedy and Reagan tax rate reductions did. I think the solution to the credit crunch is not the fed. It’s another round of tax rate reductions. It’s becoming energy independent. It’s deporting illegals and cutting the trial lawyers down to size. Doing these things would get us out of the red and back into surpluses.

I agree, except for energy independence. Reagan spurred growth by eliminating Carter's many tax-subsidized plans for energy independence. These cause weakness because they're tax subsidized, and always produce energy that costs more per energy unit than the energy sources we're currently using. Furthermore, they ignore the fungibility of the world energy market.

Reagan, upon coming to power, immediately cut the funding for many of these alternative energy projects, and immediately opened domestic oil markets to international crude. The price paid for energy dropped immediately, spurring a decade of economic growth.

Today, our glorious goberment officials are doing just the opposite. It weakens us economically to have to use energy that costs twice as much as the rest of the world is paying for energy; and it doesn't really hurt the energy producers (that it is supposed to hurt), since they just sell to the rest of the world that doesn't practice energy independence.

[mainerforglobalwarming]

I would define energy independence as greater exploration and drilling, more refineries built. We have natural resources that we must tap into until alternative energy sources become economical.

[SierraWasp]

Great comment! Save me a bunch of typing! Bravo!! Encore!!!

[SierraWasp]

I see Mr. Crudsinger could hardly wait to gleefully insert his little seeds of doubt and negativity in his second paragraph... Just could hardly wait!!!

I think I'll ping the three "Daves."

[Red Boots]

But even our domestically produced supplies are often more costly per unit than those of Saudi Arabia, say. If we can domestically produce oil at $50/ bbl and they can produce it at $30/, are we not hurt economically by having to use the more expensive oil ? Especially when everyone else in the world gets to buy and use it at $ 30 ?

This is the case because, geologically, middle eastern reservoirs are huge, and flow naturally, creating the most economically produced oil in the world.

The economic effects of having to use the more expensive product hurt us more than any supposed pain we are inflicting on them.

The only alternative supplies that help our economy, and thus our country, are those that produce energy, without government subsidies, that is cheaper than what we already use.

None of the current crop do that.

[SierraWasp]

"Slick inherited an absolutely perfect environment...--and left the US IN A RECESSION, with terrorists attacking our facilities worldwide while underfunding our intelligence agencies AND our military."

HE SQUANDERED "THE PEACE DIVIDEND" AND DEBASED THE PRESIDENCY, TOO!!! (sorry for yelling, but I'm still a pist white male that feels us all still "falling down" from the Reagan Years!)

Great summation of the situation, stockstrader!!!

[Ernest_at_the_Beach]

And we have this:

It’s Official: The Crash of the U.S. Economy has begun

And the Financial guys want a rate cut.....badly!

[Toddsterpatriot]

The fact that the crash is now being announced by the Post shows that it is a done deal. The Bilderbergers, or whomever it is that the Post reports to, have decided. It lets everyone know loud and clear that it’s time to batten down the hatches, run for cover, lay in two years of canned food, shield your assets, whatever.

Whatever.

[mainerforglobalwarming]

Isn't the high price of gasoline right now more of a refinery problem?