The Economy Rises

The US economy managed to grow by 2.4% between April and June this year, fueling many analysts beliefs that the economy is beginning to come out of the recessionary period that began over two years ago.

Most forecasters are predicting much sharper gains, with growth reaching and perhaps topping a 4 percent annual rate in the second half of this year. Meanwhile, the latest weekly figures for initial claims for unemployment benefits may be signaling that conditions in the lackluster U.S. labor market are beginning to improve, analysts said.

Commerce said that the nation’s gross domestic product, a broad measure of production of goods and services, increased at a 2.4 percent annual rate in the April-June period, after adjustment for inflation. That followed two quarters of growth at just a 1.4 percent annual rate, during which the jobless rate climbed to a nine-year high of 6.4 percent. The Labor Department will release unemployment figures for July tomorrow.

If both economic growth and job growth indicators continue to move up, it’s a strong sign that the US economy is preparing itself for a major recovery from the post-inflationary downturn that occurred in March of 2001 and was extended by the September 11 attacks, corporate scandals, and concerns over the war in Iraq. The US economy has managed to grow in the past few months, but at a far slower rate than would produce job growth.

This is good news for American workers and very bad news for Democrats who had hoped the capitalize on a soft economy for the 2004 election season. If this upturn in economic growth leads to a reduction in unemployment, it will be a sign that the economy is on the rebound, and that the economy could be in much better shape by the end of the year.

2 thoughts on “The Economy Rises

  1. The last place that an economic recovery is felt is the job market. I seriously doubt that companies are gonna be willing to go on a hiring binge between now and November 2004, meaning that voters are likely to base their votes on how the economy is working for them and those around them, rather than quarterly economic growth report figures. Also, this is about the 46th time we’ve heard that a tremendous economic recovery is just around the corner, and I think people are getting as weary hearing about those false predictions as they are about the multiple erroneous declarations that weapons of mass destruction have been found in Iraq.

  2. in th EU, growth is really lower than expected: 1.1%…
    In the US, everybody is surprised, but the growth rate is 2.5.
    acording to an article I just found, the “real” growth is in fact 0.7%. The difference is just missiles sales boosted!!!

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