An editorial / By Dale McFeatters
Scripps Howard News Service
November 01, 2007
The economy, it seems, is just diverse and extremely resilient. Neither Lazear nor Gutierrez, as is ritual at the Bush White House, said the good news was due to tax cuts.
The economic omens seemed ominous enough. Energy prices are at ridiculous levels; home sales and construction are in the tank; and the mortgage market is in turmoil.
But, the Commerce Department reported this week, the economy grew at a robust 3.9 percent in the third quarter, the highest growth in a year and a half, and that's coming off a good second-quarter growth of 3.8 percent.
Artist John Darkow , Columbia Daily Tribune, Missouri
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Usually a side effect of fast growth is inflation, but that's running at an annual rate of 1.9 percent, well within what is described as the Fed's "comfort zone." Indeed, the Fed just reduced its key interest rate for the second time this year, down to 4.5 percent. That should keep Wall Street happy although Wall Street has been happy all along.
Unemployment remains low; job growth is good. Home building is on pace for a 20 percent drop this year, but commercial construction remains high, up 12.3 percent over the quarter.
The weak dollar may irritate Americans vacationing outside the country, but the flip side is that exports went up 12 percent last year and are going up even faster this year if protectionist sentiment in Congress doesn't screw it up.
Consumer spending drives the American economy, and consumers were worrisomely skittish earlier this year. But consumer spending was up 3 percent in the third quarter, which bodes well for the all-important fourth quarter and holiday shopping.
Gutierrez urged consumers to get out there, be active, shop, spend, show confidence. So there you have it, consumers, your marching orders from the government. It would also help if you would buy a house or two.
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