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Reuters Calls 3QTR 2.5% GDP ‘Pumped Up’

From a walking on air Reuters:

Consumers and businesses pump up third-quarter growth

By Lucia Mutikani | Reuters
October 27, 2011

WASHINGTON (Reuters) – The economy grew at its fastest pace in a year in the third quarter as consumers and businesses stepped up spending, creating momentum that could carry into the final three months of the year.

The expansion was a welcome relief for an economy that looked on the brink of recession just weeks ago, although part of the pick-up came from a reversal of factors that held back growth earlier in the year, and analysts worry about 2012.

U.S. gross domestic product grew at a 2.5 percent annual rate in the third quarter, up from a 1.3 percent pace in the prior three months, the Commerce Department said on Thursday. That took output back to pre-recession level.

Man alive, that whopping 2.5% GDP for the third quarter has really got the news media stoked. And never mind that ever one of the first GDP estimates since Obama’s ascension has been revised down dramatically from their initial highly hyped reports.

And never mind that during the Bush administration the media called a 3.3% GDP a sign that we were headed for a recession.

While the growth pace matched economists’ forecasts, domestic demand showed a bit more vigor than most had expected.

"The economy is now heading in the right direction and this is very encouraging, particularly given the heightened global uncertainties and the fact that other major economies appear to be heading into recessions," said Millan Mulraine, a senior macro strategist at TD Securities in New York.

An agreement by European leaders to ramp up their debt crisis response combined with the data to spark a rally on Wall Street. U.S. stocks closed more than 3 percent higher.

Maybe we suggest that more the European situation may have had a little more to do with the stock market going up than even our amazing 2.5% GDP.

After all, the kind of people who buy bonds and stocks may have been a little shaken seeing the Greek bondholders being forced to accept a 50% loss on their investments.

And maybe some of them decided they might do better in the US stock market, where as of yet, such things are not regular occurrences. (GM and Chrysler aside.)

Prices for Treasury debt fell, with benchmark yields rising to a 2-1/2-month high. The dollar recorded its biggest one-day fall against a basket of currencies in 2-1/2 years.

The GDP report could give some breathing space for Federal Reserve policymakers who meet next week to debate additional ways to help the economy and lower an unemployment rate that has been stubbornly stuck above 9 percent for five months.

The economy needs to grow at a rate of more than 2.5 percent over a sustained period to cut the jobless rate

This is another one of those numbers that seems to change depending on the news coming from the Obama administration.

This article was posted by Steve on Friday, October 28th, 2011. Comments are currently closed.

5 Responses to “Reuters Calls 3QTR 2.5% GDP ‘Pumped Up’”

  1. Petronius says:

    A 2.5% spurt in GDP (annualized) is nothing to write home about, especially since it comes from a very low base. Still, if the numbers hold up, it’s better than a sharp stick in the eye.

    Of particular interest is the fact that the spurt seems to be driven by business spending — which suggests that American businesses are moving off the sidelines and willing to accept some risk. Such willingness may result from the fact of gridlock, i.e., that the result of the 2010 election has been to restrain, at least in part, some of the regime’s worst anti-business excesses.

    “U.S. stocks closed more than 3 percent higher.”

    The stock market advance this week was a breath of fresh air. But the US market can’t advance very far without the banking sector, and the banks remain under a dark cloud (the regime’s anti-bank attitudes, the Occupiers, Dodd-Frank regs, the Durbin Amendment, the US fiscal mess, and the ongoing European sovereign debt crisis).

    “Federal Reserve policymakers who meet next week to debate additional ways to help the economy….”

    If the economy weakens further, and Nerobama’s chances of reelection decline, look for the Fed to introduce QE3.

  2. Astravogel says:

    “Just because I said it, doesn’t make it so.”
    Orval E. Faubus

  3. canary says:

    Americans under Obama’s fear-mongering finally are buying things they did without.
    Jumping the gun Obama is on his way out and things will get better?.

    Fact: Hundreds of millions of Federal Stimulus dollars still being handed out to states just on green initiatives alone.

    U.S. borrowing more money from China to give as charity to muslim countries, and now to fight gang activity in Africa.

    Worry. Obama is going to do more destruction this year than any other. In hopes of getting re-elected by his supporters or to do as much destruction as he can to a country he hates; and will hate more for rejecting him. Obama is spending any extra time he has working on his screen play and movie about himself.

    • Rusty Shackleford says:

      “Obama is going to do more destruction this year than any other.”

      You got that right. What’s left for a spoiled brat to do when he realizes he suddenly isn’t the smartest person in the room? They have a tirade, a tantrum. He is currently devising ways to do as much damage as he can by Nov 2012 and beyond. Executive orders, calling on the EPA, DOE, etc., etc. to regulate as heavily as they can. We’re gonna see some real winners coming out of the white house.

      And, expect the yelling and scolding of the voting public to continue. In fact, he’ll call us stupid outright. He will most likely not appear when the new republican president is sworn in, having hopped a jet to some island-nation but not before he took every piece of china from the white house and all the plasma TV’s.

      However, the rhetorical fight will ensue for years as to why he got ousted. The national socialists will be the first to publish books claiming it was all racial bigotry on the part of the nation and that “it’s not ready yet for a black president” which will be screamingly hilarious if Herman Cain is elected.

      Knowing wee barry as we do, we can expect little smart-ass remarks, finger-gestures, intentional ignoring. In short, that petulant, man-child behavior that has become his modus operadi. However, the career democrats will secretly be thrilled he’s gone. He may be carrying the socialist banner but barry doesn’t fit in in ANY room. Certainly not in a room full of conservatives but he lacks the ability to communicate with the pecking-order elite of the national socialists as well. He and Hitlery hate one another…and I doubt he’s on very good terms with anyone in or out of the government.

      Being as he’s all about himself and has never had to sacrifice anything in his life or struggled or gone without, he can neither sympathize with the electorate nor even understand intellectually how working people think. The classical narcissistic error is that he assumes that everyone thinks as he does. But then, error number two is that if they don’t then there must be something wrong with them. He doesn’t like to debate. He considers himself an authority on all subjects because of the pedestal he sits upon. In the military, we used to take guys like him and put them in a position to demonstrate their highfalutin attitude and watch them fail and be humbled and humiliated. He’s never had that type of object lesson, except the job he’s in right now where he has succeeded in implementing more socialism than this nation has ever seen at one time but has also failed miserably in terms of basic understanding of how anything works. He’s the guy leaning over the technician’s shoulder while they try to fix his furnace and then tries to tell him how to do it.

      He is the quintessential “annoying little man” who uses a lot of words but says nothing. These characters are most often seen in sit-coms in small bits to make people laugh. But when it happens in real life it’s just not that funny.

  4. Not so fast says:

    I would not “trust” these GDP numbers. First of all, the only reason spending by consumers has increased in some sectors of the US economy is that’s because a lot of people have figured out that it takes up to 3 years to be evicted from their homes in some areas. So they quit paying the mortgage and go to consumer spending. How long do you think that’s going to last? This economy is worse than a trainwreck.

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