View From a Height
Commentary from the Mile High City
Thursday, October 30, 2003

It's the Economy, Stupids

I'm sure there's a reason why this Wall Street Journal report is bad news:

The GDP report showed a marked pickup in consumer and business spending. Business spending had fallen for most of the past two years and was the main reason the U.S. slipped into recession in 2001.

Consumer spending, which accounts for two-thirds of economic growth, rose at a 6.6% rate, its fastest pace since the first quarter of 1988. That followed a 3.8% rate in the second quarter, and 2% in the first quarter.

Spending on durable goods, which are items meant to last three years or more such as cars, surged 26.9%, after a 24.3% gain in the second quarter. Spending on nondurable goods such as food and clothing rose 7.9%, after a 1.4% increase in the previous quarter.

Business spending, or nonresidential investment, rose 11.1%, its fastest pace since the first quarter of 2000. That gauge rose 7.3% in the second quarter and fell 4.4% in the first quarter. Within that category, spending on computers and equipment surged 15.4%, up sharply from the 8.3% rise in the second quarter.

Federal-government spending cooled to a 1.4% increase, after soaring 25.5% in the second quarter. National defense spending was unchanged after surging 45.8% in the previous quarter.

In a separate report, the number of workers filing first-time applications for unemployment benefits declined last week despite labor strikes in California and other states that caused the filing of an estimated 5,000 to 10,000 claims.

Initial jobless claims fell by 5,000 to 386,000 in the week that ended Saturday...

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