GDP Shoots Up: Economy Continues to Grow
The President’s Tax Relief is Creating Conditions for Economic Growth
“Today’s strong performance shows the American economy is headed in the right direction thanks to President Bush’s Jobs and Growth Agenda. By creating the conditions for greater economic growth, President Bush is setting our country on the right track towards helping all Americans find work. While we are encouraged by these numbers, the President will not rest until there are enough jobs for every American worker.”
-Commerce Secretary Don Evans, 10/30/03
“Today's report on real GDP in the third quarter shows that the President's economic policies are having a positive impact on the economy. The Jobs and Growth Act has put more money in the pockets of American families and helped businesses to make new investments.”
-Treasury Secretary John Snow, 10/30/03
Today’s Economic News
The Bureau of Economic Analysis at the U.S. Department of Commerce this morning announced that the nation’s gross domestic product increased at an annual rate of 7.2 percent in the third quarter of 2003.
This third quarter surge is the strongest advance since the first quarter of 1984 and more than double the 3.3 percent rate the economy posted in the second quarter of this year.
Gross Domestic Product (GDP), the output of goods and services produced by labor and property located in the United States, is the broadest measure of the nation’s economy. Reported on a quarterly basis, percent changes in GDP reflect the growth rate of total economic output.
All Signs Point to Strong Economic Growth
The economy is responding to President Bush’s pro-growth economic policies and all signs point to a strong recovery.
Today’s GDP numbers prove that the economy continues to pick up steam and grow faster; but there is still work to be done. The President will not be satisfied as long as people who are looking for work cannot find a job.
President Bush is working closely with members of Congress to encourage them to take action on his six-point plan for economic growth. Congress needs to make progress on these important priorities, including energy legislation, making health care costs more affordable, opening new markets to American products, and reducing the lawsuit burden, which will strengthen our economy even more.
The Economy at a Glance
* The economy is adding new jobs. Increasingly optimistic economic outlook has begun to translate into hiring and employment has started to rise. Businesses hired 57,000 new workers last month after seven of cuts.
* The stock market is up 30 percent since March.
* Inflation is low.
* After-tax incomes are rising.
* Home ownership is at record highs. Homeownership reached an all-time record of 68% (of American households) in the third quarter.
* Productivity is high.
* Durable Goods orders are up. U.S. Durable goods orders - orders for those goods lasting 3 years or more - rose in September for the fourth month in five. The data shows an increase in business spending – which is crucial for a strong recovery.
* Factory orders, especially for high-tech equipment, have risen over the last several months. New orders for non-defense capital goods, excluding aircraft, rose 3.9% last month. Unfilled orders for such equipment rose 1.2%. New orders for computers and electronic equipment increased at a 36% rate in the third quarter.
* Both auto and non-auto consumer spending are strong. Consumer spending increased at 6.3% annualized pace last quarter, the biggest increase since the third quarter of 1997.
* Industrial production is on the rise. Industrial production posted a solid increase in September and a 3.3 percent annual rate of increase for the third quarter as a whole. The fifth consecutive month of increases in business equipment production suggests a sustained period of rising investment spending.
* Housing starts have remained outstanding. Housing starts rose 3.4 percent in September to an annual rate of 1.888 million units, higher than market expectations and approaching the highest level since 1986.
* Car and truck sales continue to be strong. Aided by favorable incentives, auto sales surged at a 37% annual rate to a 17 million unit pace in the third quarter, the fifth highest on record.
* Small business optimism recently reached a record high level, according to the National Federation of Independent Business, and confidence among large-company CEOs reached its highest level in eleven years according to the Conference Board.
* Consumer confidence is rising. The Conference Board reported that consumer confidence index rose to 81.1 in October from 77 in September, reflecting increases in present conditions and expectations. The report showed a rise in plans to buy autos and appliances. Some 19.7% indicated in October they expect jobs to become available within the next six months, the most since June of 2002.
In the News
“The U.S. economy rocketed ahead at its fastest pace in more than 19 years in the third quarter of 2003 as consumers, their wallets fattened by tax cuts, went on a buying spree, an unexpectedly strong government report showed on Thursday.” (Reuters, 10/30/03)
“Near rock-bottom short-term interest rates, along with President's third round of tax cuts, have helped the economy shift into a higher gear during the summer, economists say.” (AP, 10/30/03)
“Consumer spending rose at a hefty 6.6 percent pace as lower tax withholding on paychecks and child tax credit checks put more cash into shoppers' hands. It was the biggest increase in consumer outlays since early 1988.” (Reuters, 10/30/03)
“Consumers spent with abandon and businesses ramped up investment, compelling new evidence of an economic resurgence.” (AP, 10/30/03)
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