Economic Growth Grinches

[red states rule]

The doom and gloomers have been giddy opver the recent tumble in the Dow - but very quiet on the good economic news



Growth grinches
Donald Lambro
August 2, 2007

The good news last week came from the economy that grew at a robust 3.4 percent annual rate in the second quarter — disproving the gloom-and-doomers who predicted the U.S. was heading into a recession.

The bad news last week came from House Democratic leaders who said they were trying to raise corporate taxes on a lot of those businesses who contributed to the strong growth rate. It was a stark reminder that their addiction to taxes would sandbag the economy if they won back the White House in 2008. But more on this later.

The faster growth rate in the last three months, beating the consensus forecasts on Wall Street, proved that neither the decline in the housing market nor the rise in oil prices seem to have spilled over into the larger economy.

Indeed, thus far it seems that banks and other lenders — who were making money hand over fist when the housing market was hot — have been able to absorb the rising mortgage foreclosures. We still have not seen how much further the housing crunch has to go, but the evidence suggests housing sales should begin turning around sometime in the last half of the year.

So where was all this growth coming from? No one encapsulated its component parts better than Edward Lazear, chairman of the President's Council of Economic Advisers:

"I would say it can be summarized as follows," he said at a White House press briefing last week. "We got one point for consumption, we got one point from nonresidential construction and equipment and software, we got a point from exports, a point from government spending, and we lost half a point on housing. So a very balanced picture this time."

A closer look at the respective parts of the second-quarter growth rate shows an economy — despite its temporary housing illness — running at a healthy clip.

Consumer spending grew 1.3 percent, exports by 6.4 percent. Nonresidential structure investment grew at 22.1 percent, federal spending was up 6.7 percent, and state and local government spending were up by 2.9 percent.

http://washingtontimes.com/article/20070802/COMMENTARY05/108020013/1012/COMMENTARY

[red states rule]

August 01, 2007
Consumer Confidence Soars in July
Rick Moran
You may notice that the Democrats aren't talking much about the economy these days. That's because unemployment is near record lows, interest rates are stable and may start falling again soon. Inflation seems not to be much affected by the rise in oil prices (which hit another record yesterday at more than $78 per barrel at one point). And even though the real estate market is in flux (with real problems in the sub-prime lending business), the American people seem to have taken that in stride.

In fact, Americans are more optimistic about the economy now than they have been at any time for the last six years:
Consumer confidence in the U.S. jumped more than forecast in July to the highest level in almost six years, suggesting the June slowdown in spending could be temporary.

The New York-based Conference Board said its index of confidence soared to 112.6 from a revised 105.3 in June. Economists had expected a reading of 105 for last month.

In another report Tuesday, the Commerce Department reported that consumer spending rose 0.1 percent in June, the smallest gain in nine months and down from a 0.5 percent increase in May.

"The consumer took a breather in June," said Julia Coronado, senior economist at Barclays Capital Inc. in New York. "It was more of a temporary pullback. Income and wage gains look to be on track, which should help lead to a bounce-back in the second half."
Also on the rise are wages which rose 0.4% last month. More money in people's pockets gives them confidence for the future.

Is it any wonder the Democrats seem obsessed with spinning defeat in Iraq?

http://www.americanthinker.com/blog/2007/08/consumer_confidence_soars_in_j.html