Thursday, November 03, 2005


"Worst economy since depression" keeps humming along

Surely you remember the Kerry mantra from the 2004 campaign... "worst economy since the great depression, worst economy since the great depression..."

It wasn't true then, and it isn't true now. Despite major natural disasters and rising fuel costs, the Bush economy just keeps rolling along, as this USA Today report shows:

WASHINGTON (Reuters) — The economy shook off headwinds from hurricanes Katrina and Rita to grow at a faster-than-expected 3.8% annual rate in the third quarter, a Commerce Department report showed Friday.

Strong spending by consumers and the government helped power the expansion as growth in gross domestic product — the measure of all goods and services produced within U.S. borders — accelerated from the second quarter's 3.3% rate.

Economists had forecast GDP would advance at a 3.6% rate in the July-to-September quarter. The economy has now expanded faster than 3% for 10 straight quarters.

In its first snapshot of third-quarter growth, the Commerce Department said it could not separate the economic effects of the twin hurricanes that struck the U.S. Gulf Coast in late August and September, though it said incomes likely suffered a $40-billion blow from lost wages and rents.

Third-quarter GDP growth would have been more robust if the storms had not placed some drag on incomes.

Despite surging prices at the gasoline pump, the report showed so-called core inflation, which excludes food and energy, declined in the third quarter. A price gauge favored by Federal Reserve Chairman Alan Greenspan — personal consumption expenditures excluding food and energy — increased at a 1.3% annual rate compared with 1.7% in the second quarter. That marks the mildest rate of core price rises since the second quarter of 2003.

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