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| U.S.
Economy Shows Improved Growth |
Posted:
11.03.03 | |
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Recent figures show that the United States is moving out of an economic slump.
This could mean more spending money and less unemployment. Printer-friendly
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The U.S. economy is growing at the fastest rate in nearly 20 years, according
to a report released by the Commerce Department on Thursday.  In
the third quarter of 2003 - the months from July to September - the Gross Domestic
Product, or GDP, grew by a rate of 7.2 percent. The GDP is the total value of
all goods and services produced in a country during a given time. In the United
States, the GDP includes consumer spending, stock prices, housing prices and other
factors such as imports and exports. The growth rate is the strongest since the
first quarter of 1984, according to government economists.
The positive
report could mean that the United States is moving out of the economic slump it
has been in since the Sept. 11, 2001, terrorist attacks. "We believe
the report was very positive," said Lynn Reaser, the chief economist for
Bank of America Capital Management. "We saw consumer spending up. Increases
in capital spending … increases in housing and also exports so it appears
that the economy is finally coming to life." | |
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| How
we measure growth | |
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The Commerce Department report showed that the current growth is due in large
part to consumer spending which rose by 6.2 percent. The main items Americans
bought during the third quarter were homes, cars and computer equipment. On Thursday, President
Bush attributed the rise in spending to his controversial income tax cut, which
provided families at certain income levels with tax refund checks. At the time,
the president argued that cutting taxes would stimulate the economy. The idea
was that families would use their refunds to buy goods, thereby supporting business
and encouraging economic growth. "Exports are expanding, investment
is rising, housing construction is growing. The tax relief we passed is working,"
President Bush said. | |
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| Unemployment
still high | |
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Following the Commerce Department report however, some economists questioned
whether the numbers were an accurate sign of improvements in the economy. A separate
report released by the U.S. Labor Department showed that the unemployment rate
is still high. While job growth does not always coincide with a strengthening
economy, and some analysts say jobs are the last part of the economy to improve,
a high unemployment rate means millions of Americans are out of jobs and unable
to find work. Currently there are 9 million unemployed Americans, according to
the Department of Labor.  "When
you have a growth rate of 7.2 percent and don't see jobs appearing, it's a real
puzzle for economists," said William Spriggs, an economist and director of
research and public policy at the National Urban League Institute for Opportunity
and Equality in Washington, D.C.
"We all have to be concerned that
there's growth without jobs and we have to think why is that and how do we get
jobs?" he said. Part of the high unemployment rate may be due to the
high costs of running a business, says Wall Street economist Maria Fiorini Ramirez.
According to Ramirez, many companies are combating the increasing costs of running
a business by hiring part-time instead of full-time workers and becoming more
efficient with smaller staffs. | |
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| Politics
and the economy | |
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Economic issues have been a key concern among politicians campaigning for the
2004 presidential election. The president's Democratic opponents have accused
him of ignoring the economy at home as he focuses on foreign policy issues such
as the wars in Iraq and Afghanistan and the global war on terrorism.  "Why
would we want to keep anything of the Bush tax plan?" asked Democratic candidate
Richard Gephardt in a September debate. "It's a miserable failure."
The
news of GDP growth, however, could lead the Democratic presidential contenders
to direct their criticism at other areas such as the situation in Iraq. --
Kristina Nwazota, Online NewsHour | |
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