U.S. Economy Expanded at a 3.8% Annual Rate in Third Quarter

[swag]

http://quote.bloomberg.com/apps/news?pid=10000006&sid=amORV460FkBg&refer=home

Oct. 28 (Bloomberg) -- U.S. economic growth quickened to a 3.8 percent annual rate in the third quarter, more than forecast and supporting the view of Federal Reserve policy makers that the economy is withstanding higher energy costs.

The government's first estimate of the quarter's gross domestic product, the value of all goods and services produced in the U.S., compares with a 3.3 percent pace from April through June, the Commerce Department reported today in Washington. A measure of inflation watched by the Fed rose at the slowest pace since the second quarter of 2003.

The economy accelerated in the quarter because of increased consumer spending, led by more purchases of automobiles in July, a narrower trade gap, and business investment. Commerce provided no estimate of Hurricane Katrina's effect on growth. Consumer spending will be tested in coming months as homeowners face the prospect of higher winter fuel bills, economists said.

``Consumers held up pretty well in the third quarter,'' said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania, before the report. ``When people start getting heating bills there may be some sticker shock, and you also have to question how strong the holiday shopping season will be.''

Growth in the U.S. economy has exceeded 3 percent for 10 straight quarters, the longest string since the 13 three-month periods that ended in March 1986 and the best performance among nations in the Group of Seven industrialized nations, which includes the U.S., Japan, Germany, the U.K., France, Canada and Italy. The U.S. economy grew 3.6 percent in the 12 months ended in September. Only the economies of Japan and Canada exceeded 2 percent growth during the 12 months ended in June.

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[The Backlash Cometh]

1. "The economy accelerated in the quarter because of increased consumer

spending"

Well, maybe they were trying to get it all in before the bankruptcy laws kicked in?

[UpInArms]

3. where did they spend their money?

just look at the profits at the oil companies. :eyes:

[papau]

2. Those car price deals are gone - 4th qtr should be interesting. n/t

n/t

[MemphisTiger]

6. That is a good point about the employee pricing

deals. I think another article said that economists predict a 4th quarter slowdown, which is wierd considering it's the holiday shopping season.

[MemphisTiger]

4. It was spent on gas and plywood for hurricane victems

Does this include the war spending?

[thoughtanarchist]

5. Yes.

Govt spending is factored into the GDP. That's why I think looking at the national debt as a percentage of GDP is a bogus statistic.

When govt increases deficit spending, GDP rises along with the debt, making the ratio seem more benign than watching the dollar figure of the mounting debt.

edit: spelling