HOLY HELL! Check out this article on Yahoo news...
"Rocketed"???
Did they hire a conservative writer?
GDP Growth Strongest Since 1984
WASHINGTON (Reuters) - The U.S. economy rocketed ahead at its fastest pace in more than 19 years in the third quarter of 2003 as consumers, their wallets fattened by tax cuts, went on a buying spree, an unexpectedly strong government report showed on Thursday.
U.S. gross domestic product surged at a 7.2 percent annual rate in the July-September period, the Commerce Department (news - web sites) said. It was the strongest advance since the first quarter of 1984 and more than double the second quarter's 3.3 percent rate.
The increase handily outstripped consensus forecasts on Wall Street, where most economists had looked for a gain closer to 6 percent.
Consumer spending rose at a hefty 6.6 percent pace as lower tax withholding on paychecks and child tax credit checks put more cash into shoppers' hands. It was the biggest increase in consumer outlays since early 1988.
The report was certain to be heralded by the Bush administration, which has been happy to trumpet the impact its recent tax cuts have had in spurring a sluggish recovery.
Congress passed a $350 billion White House tax plan in the spring that lowered tax-withholding rates in July and pumped out about $13.7 billion dollars in child tax credit checks in July and August.
Most economists expect growth to cool but come in around a solid 4 percent in the final quarter of the year and through 2004. But some have expressed lingering concerns that growth could falter as the tax-cut impact fades, particularly if jobs growth -- which has been sorely lacking -- does not pick up soon.
Business spending, which has been lacking even as the economy climbed out of recession, rose 11.1 percent in the third quarter, the steepest climb since the first quarter of 2000 and the second straight quarterly advance. Cuts in business spending had long been the missing link for a more broad-based recovery as firms showed a reluctance to commit to long-term spending plans.
The third-quarter increase in business investment reflected a sharp pick-up in spending on equipment and software, which moved forward at a 15.4 percent annual pace. In contrast, spending on structures dipped.
A shrinking in the U.S. trade deficit also helped growth, and ensured that sales of U.S.-produced goods and services rose at an even faster pace than GDP (news - web sites) -- a 7.8 percent increase that marked the strongest performance in over 25 years.
Government spending also rose, even though defense spending was flat after giving a big boost to growth in the second quarter.
The report also offered a sign that inflation was starting to move up after a sharp slowdown earlier this year that fueled worry over the possibility of deflation. The price index for consumer spending, excluding volatile food and energy costs, rose at a 1.8 percent annual rate, accelerating from the second quarter's 1.1 percent advance.
