ECONOMY EN FUEGO
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James Joyner | Tuesday, November 25, 2003 |
WaPo reports,
The nation’s economy surged forward in the third quarter at a rate well in excess of estimates just a month ago, the government reported this morning, thanks largely to a long-awaited increase in corporate investment in inventory and equipment.The numbers suggest that the economy is well past recovering from the doldrums of the past two years.
The revised estimate — an annual growth rate of 8.2 percent — was a full percentage point higher than the figures issued last month and dwarfed the second quarter growth rate of 3.3 percent. Wild swings in GDP growth from quarter to quarter are common.
It was the fastest quarterly growth rate since the first quarter of 1984. But it will be revised again next month as more solid figures come in.
The unusual full-speed-ahead growth is expected to slow down in the future. Nevertheless, the numbers, coupled with stronger profit reports recently from publicly traded companies, suggested that the economy is on a solid upward curve, held back, for the moment, only by uncertainties about Iraq and other international issues.
The government’s Bureau of Economic Analysis attributed the acceleration to an upturn in exports, a slowdown in imports, an increase in investment in inventory by private companies and accelerations in the purchase of computer equipment and software.
The Gross Domestic Product is the broadest measure of economic activity, based on consumption, investment, net exports, government purchases and inventories. Consumption is the largest component.
Good news indeed.
About the Author: James Joyner is the publisher of Outside the Beltway and the managing editor of the Atlantic Council. He's a former Army officer, Desert Storm vet, and college professor with a PhD in political science from The University of Alabama. He lives just outside the Beltway in Alexandria, Virginia with his wife and infant daughter.
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