ECONOMY EN FUEGO

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.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Paul says:

    Good news indeed

    To whom?

    (/snark)