GDP is 2.4%, Manufacturing Expands, Joblesss Claims Fall, Stocks Surge on News (Daschle Suicidal)

THE WALL STREET JOURNAL ^ | July 31, 2003 | ONLINE NEWS ROUNDUP

[Pubbie]

This is GREAT news! All the numbers on the economy beat expectations handily! The Bush Recovery is well under way

[tomahawk]

I don't think raising GNP by increasing Government Spending is the way to go.

[lelio]

Spending by the federal government jumped 25.1%

How much of the GDP increase was due to government spending?

[Principled]

Federal spending was more than enough to offset a slight decline in spending by state and local governments. The increase in government spending added 1.4 percentage points to GDP growth for the second quarter.

This is not too clear to me, but is this the answer to your question? I had/have the same question...

[lelio]

If it added 1.4 percentage points to bring the gain up to 2.4%, does that mean without the government spending growth was really 1.0%, below the expected 1.4%.
Again, its not really clear. But when are these figures ever clear the first time around?

[steve86]

I don't think raising GNP by increasing Government Spending is the way to go.

Hey, you're raining on their parade.

[gimmealewinsky]

Sounds like an FDR approach to getting out of a recession. If it works fine, but the danger is obvious- as soon as that fed spending ceases or contracts do we have another downturn? I think the primary obstacle right now is psycological, ie people aren't as confident, don't feel as stable and therefore tighten up a bit- self fulfilling prophecy.

[Prince Caspian]

I'm sure the estimates already factored in government spending to arrive at 1.4%.

[spokeshave]

Who cares.....Dubbya will ram through yet another tax cut and the dems are more deeply saddened.

[Pubbie]

Yes but there was much more to the report than GDP.

Consumer AND Business spending was up, Jobless claims dropped despite an expected increase, and manufacturing is picking up.

Also if it hadn't been for low inventories taking .77 percentage points off the GDP, GDP would have been 3.2!

And besides, My Options in Financial stocks LOVE IT (And so do I!)

[aegiscg47]

I still say that if the DOW breaks that psychological barrier of 10,000 the 2004 election is over. Being successful in the war on terror and getting the economy revived will put the entire Democrat party on suicide watch

[Nucluside]

It's NOT the way to go. Keynsian economics has been s--t
canned for years.

[wjcsux]

Don't you just love the fresh sound of whining RATS in the morning?

[Nucluside]

"It's not the way to go..."

BUT, the other indicators are up as well, and that will ensure the next election for us!!! Hee Hee Hee.
What's next, Carrville?

[Pubbie]

The numbers were excellent across the board!

If this keeps up (and I believe it will because I'm totally long the market) the GOP will be rocking and rolling in Nov '04!

[lelio]

This is a general question about GDP: if automobiles were made of 80% foreign parts and we just slapped them together here and rolled it down to the car lot, would the full $30k price for a car be included in GDP?
I ask as there's much less of a multiplier when you by the above car versus one that's 10% made of foreign parts. But according to the GDP they could be counted the same.

[Tauzero]

65% of the increase was from government spending.

Less government purchases, GDP grew at a paltry +0.31%.

The funny thing about this number is that it makes more government spending look like a good thing, and less government spending like a bad thing. Which ironically has some people here cheering bigger government.

State/local purchases declined last quarter. Is that a bad thing? No? Well, it slightly depressed this GDP number.

Some government spending is a good thing -- infrastructure and defense, for example. If we didn't have a military, we could be invaded, and that'd really depress the economy. But that effect is hard to quantify, and to first order all government spending is a misallocation of resources.

[Tauzero]

"If it works fine, but the danger is obvious- as soon as that fed spending ceases or contracts do we have another downturn?"

Of course it might, since, by the very definition of this statistic, government spending is a good thing.

[Lunatic Fringe]

I challenge all of you to go to CNN.com's main webpage and find a link to this great news... there isn't even a link under the Business Section!

[Orangedog]

Is this an improvement?...yes. But I don't see the consumer spending as being susstainable. The consumer has been spending 105%-110% of his income for quite some time. Being so far in debt, an increase in interest rates would not help. The recent spike in the 10 yr. treasury and mortgage rates is not a good sign. I think Greenspan really cheesed-off the bond traders with his comments on the long bond yeild.