NationStates Jolt Archive

http://news.ft.com/cms/s/07ef349a-42d6-11d9-bea1-00000e2511c8.html

US economy grows 3.9% in third quarter
By Andrew Balls in Washington
Published: November 30 2004 13:45 | Last updated: November 30 2004 13:45

Strong consumer spending and business investment and a slightly lower than previously reported trade deficit meant the US economy grew at a 3.9 per cent rate in the third quarter, the Commerce Department said.

The upward revision from the 3.7 per cent advance estimate was above consensus expectations and represented a rebound from 3.3 per cent growth in the second quarter.

Core personal consumption expenditures inflation, excluding food and energy, the Federal Reserve's preferred measure of inflation, was unchanged at a 0.7 per cent rate in the quarter - the lowest reading since the 1960s.

The report provided further support for the Fed's case that the economy has picked up, after an earlier soft patch, and that with inflation under control it will be able to raise rates at a “measured” pace. Investors see another quarter point increase to 2.25 per cent as likely when the Fed meets later this month.

Consumer confidence dropped last month, dragged down by concerns about the labour market, the Conference Board reported. Economists had expected an improvement following the strong October employment report. The Conference Board index has declined in each of the past four months.

However, consumer spending rose at a 5.1 per cent in the third quarter, the Commerce Department said, stronger than its advance estimate and well above the 1.6 per cent rate recorded in the second quarter.

Business investment was revised up and equipment investment rose at a strong 17.2 per cent rate.

The US trade deficit in the quarter was revised down from $598bn to $588bn. Although export growth slightly outpaced import growth in the quarter, the deficit was still higher than in the second quarter.

Inventory accumulation slowed more than previously reported, a drag on growth in the quarter but a good sign for growth in the coming months.

Kathleen Stephansen, economist at Credit Suisse First Boston in New York, said the revisions pointed to more balanced growth - with consumer spending and business investment up, and improved trade position and lower inventories. “It is not a dramatic change but a better balance of growth and lower inventories bodes well for the fourth quarter,” she said.

Corporate profits from current production rose 8.4 per cent from a year ago, but dropped 2.4 per cent from the second quarter. Economists said the quarterly decline largely reflected insurance claims related to hurricane damage, but that the trend was still one of moderating profits after strong profit growth last year.

Hey, same here. People screaming about economic doom and gloom are incredibly misguided.

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http://news.ft.com/cms/s/fa995dca-42ad-11d9-bea1-00000e2511c8.html

http://news.ft.com/cms/s/61cc41da-42d9-11d9-bea1-00000e2511c8.html

http://news.ft.com/cms/s/fa995dca-42ad-11d9-bea1-00000e2511c8.html
bah, only partial economic indicators these are, and they are no where near as important as Consumer spending.

bah, only partial economic indicators these are, and they are no where near as important as Consumer spending.

Yoda!

Well, consumer confidence lowered, against all expectations, and that is an important indicator. And the majority of economical forecasts don't foresee a big 2005. Oil too high, markets are nervous with its price, and with the US deficit, EU interests rate, blablablabla. So don't get your hopes too high on a super duper fast economical recovery.

Yoda!

Well, consumer confidence lowered, against all expectations, and that is an important indicator. And the majority of economical forecasts don't foresee a big 2005. Oil too high, markets are nervous with its price, and with the US deficit, EU interests rate, blablablabla. So don't get your hopes too high on a super duper fast economical recovery.
I'm not saying that there's going to be a super fast, or even remotely fast growth rate in '05, but there will be moderate, steady growth. A sign the economy is back on track.

Yep, Yoda speak great is.

Anyone hear what Greenspan had to say? The growth rate is fine...but the other factors are in serious danger. Consumer saving/borrowing is at levels that are in the Fed's words "unsustainable", the dollar is getting too low and the "Revived Bretton Woods system" is too likely to fail when Asian markets grow tired of propping up the dollar.

I don't like what I see people! We were in such a hurry to get out of the tech bubble problems we went and started another bubble. Housing markets are greatly distorted, we've seen growing governance issuses with the FDA/Drug companies and Insurance/Accounting firms. In other words...I think the other shoe may drop within a few years.

bah, only partial economic indicators these are, and they are no where near as important as Consumer spending.

Well considering consumer spending is only one part of the GDP forumla, I'd say there are some other fairly important things out there. Things like government spending and investments. As well as tax rates, fed monetary movement, and consumer conifdance. I think part of this spike may only be due to the holiday season.

Anyone hear what Greenspan had to say? The growth rate is fine...but the other factors are in serious danger. Consumer saving/borrowing is at levels that are in the Fed's words "unsustainable", the dollar is getting too low and the "Revived Bretton Woods system" is too likely to fail when Asian markets grow tired of propping up the dollar.

I don't like what I see people! We were in such a hurry to get out of the tech bubble problems we went and started another bubble. Housing markets are greatly distorted, we've seen growing governance issuses with the FDA/Drug companies and Insurance/Accounting firms. In other words...I think the other shoe may drop within a few years.

Agreed! Also it would be pretty hard to spend a half a trillion dollars more than you collect in taxes and not get some bounce. Its basic keynesian economics. Debt both the national kind and the simple household kind is a ticking time bomb though, we will be in real trouble when the baby boomers retire and the deficit goes bonkers.

Agreed! Also it would be pretty hard to spend a half a trillion dollars more than you collect in taxes and not get some bounce. Its basic keynesian economics. Debt both the national kind and the simple household kind is a ticking time bomb though, we will be in real trouble when the baby boomers retire and the deficit goes bonkers.


Someone should really circulate a memo telling them that their retirement has been cancelled.

I'd do it, but I'm busy.

So it is true that 2010+ is really the end?

Or do you think the government would somehow change the retirement funding system?

Come to think of it, US maybe should have more wars, soldiers coming back from wars usually creates a generation of baby boomers. Maybe one war every 20 years.

So it is true that 2010+ is really the end?

Or do you think the government would somehow change the retirement funding system?

Come to think of it, US maybe should have more wars, soldiers coming back from wars usually creates a generation of baby boomers. Maybe one war every 20 years.

Maybe we should abolish social security and make the lazy old people get jobs. Specifically jobs making "granny porn". Than we could sell all that granny porn to the Japanese because they are into that weird shit, and we'd close the trade gap.

So it is true that 2010+ is really the end?

Or do you think the government would somehow change the retirement funding system?

Come to think of it, US maybe should have more wars, soldiers coming back from wars usually creates a generation of baby boomers. Maybe one war every 20 years.


Well, I actually think that they'll just jettison the earnings link, and make income 100% subject to social security.

That way earners pay more, and progressively recipients get less.

Eventually though, it is tantamount to cancelling retirement for a lot of people. (Serves them right for driving propert prices so high in metro areas though, so I can't say I have any sympathy.)

The economy will always do well outside of a recession/depression. The problem with the US isn't the economy, it's with the increasing deficit. The economy is increasing, but the government is borrowing and spending too much.

Republicans : Borrow and spend is their motto

By Andrew Balls in Washington

That gave me a good chuckle.

The economy will always do well outside of a recession/depression. The problem with the US isn't the economy, it's with the increasing deficit. The economy is increasing, but the government is borrowing and spending too much.

Republicans : Borrow and spend is their motto
Democrats: Like the Republicans, but more so.

Hey, if you guys would get your government to stop the illegal (at least the WTO thinks so) tarifs on our softwood lumber, it would probably lower the average cost of a new American home by a couple thousand bucks.

Hey, if you guys would get your government to stop the illegal (at least the WTO thinks so) tarifs on our softwood lumber, it would probably lower the average cost of a new American home by a couple thousand bucks.

All tarrifs, and NTBs should be removed. From everywhere.

I'm not much for understanding economics trends, but is 3.9% good in retrospect?

All tarrifs, and NTBs should be removed. From everywhere.

Except in newly developing industries, where there is a reasonable chance of them becoming more efficient and productive in the future and to prevent dumping.

Also you don't want to become too dependant on other countries for food sources and such.

Other than that, yeah you're right.

Except in newly developing industries, where there is a reasonable chance of them becoming more efficient and productive in the future
Disagree here. You shouldn't use tarriffs to protect companies so that they can later develop economies of scale equal to established corporations producing the same product. It's better to force companies to get a head start through innovation, increase sales of their superior/cheaper product then reap the benefits of economies of scale.

and to prevent dumping.
Agreed, within reason and an accepted framework. Though even then there's a danger of it being too politicised.


Also you don't want to become too dependant on other countries for food sources and such.

Why not if they're dependant on you for other goods and services?

Not trying to infringe on other threads, but if the government were serious about bringing in more tax revenues they could raise a shit-load by legalizing and taxing the holy-hell out of our various vices that are still illegal.

Not just marijuana/drugs, but prostitution, gambling, whatever. Also, stop with the tax break writeoffs for stupid shit like Hummers (the car - not the act). Plus, no more tax free status for religous organizations. Don't know if they still are, but scientologists were granted tax-free status not all that long ago. SCIENTOLOGISTS!!! :headbang:

As far as the economy goes? Fah! Give it a while, it'll change. Good, bad, good, bad, really bad, better, and so on and so on and so on.

Not trying to infringe on other threads, but if the government were serious about bringing in more tax revenues they could raise a shit-load by legalizing and taxing the holy-hell out of our various vices that are still illegal.

Not just marijuana/drugs, but prostitution, gambling, whatever. Also, stop with the tax break writeoffs for stupid shit like Hummers (the car - not the act). Plus, no more tax free status for religous organizations. Don't know if they still are, but scientologists were granted tax-free status not all that long ago. SCIENTOLOGISTS!!! :headbang:

As far as the economy goes? Fah! Give it a while, it'll change. Good, bad, good, bad, really bad, better, and so on and so on and so on.

Well, if, IF this post is at all serious...

Taxes are well and good, and "sin taxes" are well known in America (Alcohol and gambling anyone?), but in many cases where the tax on a particular good is excessive people tend to bootleg and evade anyway.

Limit access too much and you get a runners and bootleggers, restrict prices and you get an "unofficial" or "street" price. Think Canada-bought drugs; the exact same drugs that show up in the US, but radically cheaper. The reason? No reason at all, 'cept that the black market isn't gouging the consumers.

So on goods and services we can agree; tax write offs for companies that gouge their customers are bad, sin taxes can be helpful.

However, I cannot agree with you on Religion, IF it stays within its legal bounds, even scientology should be tax-free. However, I do believe that Churches should be held accountable for taxes if they cross the line from protected speech to political "involvement" in illegal ways (ie, I think they should enforce the current law)

Well, if, IF this post is at all serious...

Taxes are well and good, and "sin taxes" are well known in America (Alcohol and gambling anyone?), but in many cases where the tax on a particular good is excessive people tend to bootleg and evade anyway.

Limit access too much and you get a runners and bootleggers, restrict prices and you get an "unofficial" or "street" price. Think Canada-bought drugs; the exact same drugs that show up in the US, but radically cheaper. The reason? No reason at all, 'cept that the black market isn't gouging the consumers.

So on goods and services we can agree; tax write offs for companies that gouge their customers are bad, sin taxes can be helpful.

However, I cannot agree with you on Religion, IF it stays within its legal bounds, even scientology should be tax-free. However, I do believe that Churches should be held accountable for taxes if they cross the line from protected speech to political "involvement" in illegal ways (ie, I think they should enforce the current law)


The reason why canadain drugs are so cheap is because the candadian government refuses to pay anymore for them. They are , in fact, sold at a loss up there.

I believe that the Candanains are moving to ban re-importation to the US though because they are afraid of what will happen to their unfunded subsidy.

As to sin taxes, you can tax the shit out of most things, and really very little happens. Look at the cost of a pack of cigarettes in New York.

As to sin taxes, you can tax the shit out of most things, and really very little happens. Look at the cost of a pack of cigarettes in New York.

Well, obviously the tolerance level of smokers hasn't yet been reached in NY. ;)

I know that on the other coastline, nearly every Native American Tribe has tax-free ciggarette shops over here. They get quite a bit of business from people who can spare the time to drive out of the cities to buy them. Thus the 200% Taxes on ciggarettes can be avoided fairly easily.