http://biz.yahoo.com/ap/050629/economy.html?.v=11 Economy's Growth Is Better Than Expected Wednesday June 29, 12:43 pm ET By Jeannine Aversa, AP Economics Writer Economy Advances at Solid 3.8 Percent Rate in First Quarter, Better Than Previously Thought WASHINGTON (AP) -- The economy logged a solid 3.8 percent growth rate in the first quarter of 2005, a performance that was better than previously thought and a fresh sign the expansion is on firm footing. The new reading on gross domestic product, released by the Commerce Department on Wednesday, marked an improvement from the 3.5 percent annual rate estimated for the quarter just a month ago and matched the showing registered in the final quarter of 2004. GDP, the broadest gauge of the economy's health, measures the value of all goods and services produced within the United States. Stronger spending on housing projects, more investment by business in equipment and software, and a trade deficit that was less of a drag on economic growth all played a role in the higher first quarter GDP estimate. The first-quarter's showing was slightly better than the 3.7 percent growth rate that economists were forecasting before the report was released. "It was a solid quarter, particularly in the face of high and rising energy prices," said Mark Zandi, chief analyst at Economy.com. "It illustrates the resilience of the economy and the durability of the current economic expansion." On Wall Street, stocks edged up. The Dow Jones industrials were up around 7 points and the Nasdaq was up around 3 points in morning trading. While Republicans and Democrats might have different takes on how various parts of the economy are faring, the Bush administration pointed to the latest GDP report as evidence that economic activity is improving. "The economy is showing solid and sustained growth and job creation," White House press secretary Scott McClellan said. "The policies that we have put in place are working. Our economy is growing stronger." To keep the economy and inflation on an even keel, the Federal Reserve has boosted short-term interest rates eight times -- each in quarter-point moves -- since June 2004. Another bump-up is expected when the Fed wraps up a two-day meeting on Thursday.
we are poised for a good run with the economy but until we get oil prices under control it will be very slow.
Seems to be doing nicely even with high oil prices. Without the high oil prices we could be set for truly excellent growth.
This is an honest question. How much did it grow without including government spending? In other words, what was the growth in the private sector.
A better question to ask is how much the tax cuts have increased disposable income, which in turn increases consumption expenditures. I am certain that the answer is a substantial amount. In terms of what caused the growth this quarter, the article I referenced stated the following: No mention of goverment spending.
The government logs those statistics and releases them every month, such release was probably the basis of this story, you have to go to the source texxx.
Ahh, Sam so you're saying that you are familiar with source of this data? I wasn't the one curoius about this question, but the question is how much govt spending drove GDP increase. If you know of a source that has this information, do share. I'm especially interested in this source since you claim that it "probably" was the basis of this story. Back it up. Thx in advance.
The GDP of the U.S. has no impact at all on my personal life. My bills and groceries are still too expensive, my tuition still increased, the interest rate on my student loans is still too high, and I'm not making any more money than I was 4 months ago. The GDP is a measure of the rich getting richer, just like the Dow Jones/NASDAQ and all that garbage. I wish people would stop believing that these geographically-large-scale yet highly-class-localised economic boondoggles can function as a "quality of life" indicator for the majority of Americans. It's meaningless crap to me. Bull**** or Bear****, makes no difference.
You can go to the site and look at the spread sheet. I tried to link it here but unsuccessful. It is an excel spreadsheet, I will try again later- my apology. Looks like consumer spending was up, housing was up and defense spending up. I am guessing (guess mind you) that debt fueled this expansion as it has for the past many years. Keep borrowing and we can keep spending and we can keep expanding. I will let others decide if this is good or bad.
Please excuse yourself from any future thread that deals with the economy, finance or anything money related at all. You clearly are lost and confused.
Yeah I quit reading after this gem. People, the economy is back on firm footing. Look at the numbers objectively. As much as each of you with your personal agendas against the administration don't want to admit it, I'm sorry to say that the economy has righted the ship and is doing well. I guess it's beyond some of you to enjoy that bit of good news. Carry on with your doom and gloom, and see if you can't post 2-3 liberal "outrages of the day" before noon today. Thx in advance.
In some respects, yes, the economy is recovering. I only have one question: Where are the jobs? Other than with the military and Halliburton, of course......
Ahh, Sam so you're saying that you are familiar with source of this data? I wasn't the one curoius about this question, but the question is how much govt spending drove GDP increase. If you know of a source that has this information, do share. It's actually pretty simple to figure out. At a very minimum, the GDP *should* increase by the amount of the deficit that was financed by foreign debt. If you borrow $200B from foreigners and then go spend it in the US or on US companies, the GDP is going to increase by at least that much. It may be more due to the constant transfer of money. However, this would be a one-time gain. Whether it would be sustainable or not is a different issue.
Uhh, nope. Here's a quick econ 101 lesson for you, free of charge. An increase in government spending will shift the aggregate demand curve to the right . The size of the shift would be equal to the change in government spending times the multiplier. The effect of the shift on the GDP depends on the shape of the aggregate supply curve. If the shift occurs along the horizontal segment of the aggregate supply curve (the Keynesian range) , the change in the GDP will be equal to the size of the shift. If the shift takes place along the vertical segment of the aggregate supply curve (the full-employment level of GDP), the change in the aggregate demand curve will only result in a higher price level without any effect on the real GDP. That could be seen as a movement up along the new (shifted) aggregate demand curve to the vertical segment of the aggregate supply curve. A shift along the intermediate range of the aggregate supply curve would result in an increase in the price level as well as some growth in the real GDP. A logical place for you to start this analysis would be to understand the incremental increase in goverment spending to understand its impact on the change in GDP. Then you could approximate a supply curve. After that you could bring some reasoned analysis into this discussion. Thx in advance.
Sorry, actually I am a card carrying conservative right wing republican who is very much against fiat currency, huge government debt and a central bank. And I don't care which administration is entangled in those elements they will one day wreck the best economy the world has ever seen. My personal footing feels pretty good, but underneath are the everlasting arms of huge and increasing paper money supplies, huge and increasing debt and a central bank that relies on asset bubbles to float the boat.
I don't know about the rest of you, but the booming economy has improved my financial situation considerably. Consequently, I have been able to double my annual contribution to bigtexxx's favorite charity: http://www.opossumsocietyus.org
Uhh, nope. Here's a quick econ 101 lesson for you, free of charge. Thanks for the worthless lesson, but quoting basic economics is not really useful here. You're talking long-term shifts, which account for changing prices and other such factors related to dumping more money into the economy. As noted, I was talking about a one-time effect on GDP. If you create $200B and spend it - assuming it comes from "new" money, which is why I noted the foreigner portion - you will get an immediate increase of $200B in the GDP. This applies to any situation and is very simple and straightforward. Whether you can sustain that and how it impacts the long-term economy is a different equation.
I caught one snooping around my veggie garden a couple of mornings ago. Chased the bastige right out into the street.
