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| GDP Growth Strongest in Nearly 20 Years |
November 03, 2003 |
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| Historical Note: The month of October has sometimes been a poor-performing month for the stock market, investments and other securities. For example, Black Tuesday—the crash that started the Great Depression—fell on October 29, 1929. October 19, 1987—Black Monday—was Wall Street’s worst day ever. This year brings a different story.
GDP Growth Strongest in 20 Years
· Most economists agree that nearly rock-bottom short-term interest rates, coupled with President Bush’s jobs and growth plans over the last two years, are largely responsible for this incredible spurt in economic activity.
· Third quarter economic growth surges at 7.2 percent—the best since 1984, exceeding analysts’ 6 percent forecast.
· Spending on “big-ticket” items—like cars—increased by an astounding 26.9 percent in the third quarter (Source: Washington Post, 10/30/03).
· Consumer spending on “non-durables” like food and clothes increased by 7.9 percent in the third quarter—the best since 1976 (Source: Washington Post, 10/30/03).
· Consumer confidence increased in October, ending a 5-month slide in this index (Source: Consumer Board).
· Business spending on equipment and software increased by 15.4 percent—the largest increase since the first quarter of 2000, up from 8.3 percent in this year’s second quarter (Source: Washington Post, 10/30/03).
· Productivity (non-farm) increased 3.9 percent during the first 2 ½ years of this Administration—the fastest pace for the start of any presidency since John F. Kennedy’s (Source: Department of Commerce).
· Federal government spending, which grew at a 1.4 percent rate, “was only a minor contributor to GDP,” (Source: Washington Post, 10/30/03).
· Exports rose for the first time in four quarters to over $1 trillion, boosting U.S. manufacturing (Source: Committee on Ways and Means).
Markets
· Stocks. Shareholder wealth is up $2.9 trillion—an increase of 22 percent—since October 2002. Fifty percent of this increase in stock market wealth has occurred since the tax cut agreement was reached in May (Source: American Shareholders Association).
· Housing. Homeownership rate was 68.4 percent in the third quarter—its highest level ever (Source: White House).
o Housing sector growth (annual rate) increased at over 20 percent (Source: Committee on Ways and Means).
Job Creation
· In the month of September, the U.S. economy created 57,000 net new jobs—the first gain in non-farm employment since January (Source: White House).
· Since the 2003 tax relief plan, initial claims for unemployment insurance have declined by more than 10 percent (Source: American Shareholders Association).
o The four-week moving average has stayed below 400,000 claims for four straight weeks, indicating a stabilizing labor market (Source: American Shareholders Association). |
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