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Economy grows, but not in Europe

The U.S. economy came in at "a chipper 3.4 percent annual growth rate in the second quarter, fresh evidence the country’s business climate is healthy despite surging energy costs." In the first quarter the economy grew at 3.8 percent.

Update: USA unemployment is at 5%, the lowest since September, 2001. The unemployment in France fell to 10.1% (from 10.2%). For the 12 country Euro region, unemployment is at 8.8%, and the economic growth was "dissapointing" at 1.3% (they had expected 1.6% in April).

Discussions - 7 Comments

You know, I wish people would remember statistics like these when the (unfavorably) compare us to Europe. Europe is full of moribund social systems...their "utopia" is a death wish, although they don’t seem to realize this.

I saw the lead-in to this story on the BBC and it went something like this (to paraphrase):

"The rising energy costs have not yet had the negative impact on the American economy as expected as the latest numbers show a 3.4% anual growth rate..." blah blah blah.

Unbelievable. Talk about exposing your agenda!?

Here is the BBC story that I read about it. I will quote, not paraphrase the headline and first paragraph:

"US economic growth remains robust

The US economy has racked up another quarter of robust growth, despite fears rising fuel costs may limit expansion."

Yeah, Greg, that’s some "agenda"! Give it a rest already. If there was a decade-long depression, you’d probably cry "agenda" if BBC reported "negligible bump in otherwise perfect American economy."

It is interesting to note that we still had a 3.4% growth despite inventories being cut by a huge margin. The inventories were cut, as the WSJ reports
because of concerns the economy was in a "soft patch" and because of rising energy costs were feared to be a drag on growth. This scaling back of inventories is said to have shaved about 2.3% off of the GDP numbers. Moreover this points to a very robust and vibrant economy. The fact that scaling back inventories had a negative 2.2% effect and we still had a 3.4% growth means the economy is poised robust growth in the future.

I think it is also interesting to note that because of the above mentioned firms such as Morgan Stanley, UBS and J.P. Morgan Chase have boosted their third quarter projections to 5.0%, 4.0% and 4.5% respectively.

Unfortunately, much of this growth is at the expense of the largest budget deficits in the history of the US. Neocon economics in action!

Well, HDT, last I looked the budget deficit was shrinking. Besides, that whole cockamamy theory that deficits boost economic growth is pure horsefeathers. Nobody believed it when Lloyd Bensen tried to sell it to the American people back in 1988, and no one (really) believes it now. AH, with the possible exception of YOU.

HDT, What are you talking about. You really need to jump off the I hate everything that isn’t lefty nonsense. Seriously, I want to know, do you really think the only reason the economy has boomed the past 2 years is because of deficit spending? As an economist I would have to say it limited are potential growth instead of helping us grow. But of course, not being an economist I am sure your point of view must be right I am sure you know what you are talking about. Give me a break. Open up an elementary economics book and read it.

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