Economy Grows in 3rd Quarter; Bad Weather Stalls Indonesia Relief Efforts

BY Tom LeGro  October 29, 2010 at 10:30 AM EDT

The economy grew this summer at a slightly faster rate than last summer, as the Commerce Department said Friday that the economy expanded at a 2 percent annual rate in the July-September quarter. It is an improvement from the 1.7 percent growth in the April-June quarter.

“Spending by U.S. consumers, the largest component of GDP, spurred the uptick, rising in the third quarter to a 2.6 percent annual rate. The numbers also got a boost from business investment, federal government spending and businesses building inventories. International trade and the housing sector were both drains on economic growth,” the Washington Post reports.

The Atlantic’s Daniel Indiviglio writes:

“Breaking down the numbers shows progress in many sectors of the economy. Today’s report provides Democrats the opportunity to exhale, as it could have been much worse…. Overall today’s report provides some reason for optimism. The economy grew more quickly in the third quarter than in the second, and that was in spite of an extremely weak housing market.”

The Economist’s glass is a bit half-empty compared to Indiviglio’s analysis:

“[R]eal output has yet to return to its pre-recession peak, even after five quarters of recovery. That’s a reflection of the steepness of the previous decline but also the shallowness of the recovery….

“Other aspects of the report are less than encouraging. Private investment growth slowed in the third quarter. The contribution from private investment declined almost across the board, but the biggest hit came from a substantial decline in residential investment, associated with the slowdown in housing markets following the end of the government’s housing tax credit. Import growth slowed (imports had a huge negative effect on second quarter growth), but so did growth in exports….The recovery remains a disappointing one, in other words.”

Bad Weather Hampering Relief Efforts in Indonesia

Poor weather and a shortage of boats are slowing relief efforts to the remote areas of the Indonesian islands hit hardest by a tsunami that has killed more than 400 people and left more than 300 missing, an official said Friday.

The tsunami warning systems that were installed across Asia after 2004′s massive and deadly tsunami did nothing to save villagers on the islands, the Associated Press reports.

Experts told the AP that a tsunami generated by an earthquake close to shore, as was the case Monday night, can reach land long before an effective warning can go out. Additionally, some villages do not have telephone lines, which would make it extremely difficult for a warning to get through in time.

After some news organizations claimed that the German-Indonesian tsunami early warning system was vandalized and did not work properly, the German Research Centre for Geosciences (GFZ) issued a statement Thursday calling those claims baseless.

“Contrary to reports stating otherwise, all components of the tsunami early warning system worked properly. Reports of broken or even deliberately destroyed system units are entirely unfounded,” the GFZ release says, Nature.com reported

Iran Ready to Restart Nuclear Talks

Iran told the European Union on Friday that it is willing to restart international negotiations over its nuclear program after Nov. 10. The prospect of talks comes after agreement on a new range of United Nations and European Union sanctions targeting Iran’s nuclear program.