[sf3006]

U.S. Economy Expanded at a 4.3% Pace in Third Quarter (Update3)

Nov. 30 (Bloomberg) -- The U.S. economy grew at a 4.3 percent annual rate from July through September, the quickest since the first quarter of last year and evidence of resilience in the face of record energy costs.

The revised figure for gross domestic product, the value of all goods and services produced in the U.S., was higher than economists forecast and compares with a 3.8 percent pace initially estimated, the Commerce Department's figures showed today. Growth was 3.3 percent in the prior three months.

Stronger demand and declines in inventories will keep factories humming, providing fuel for an economy that's grown in excess of 3 percent for 10 straight quarters, the longest such streak since 1986. Consumer spending, construction and business investment were more robust than the government first estimated.

``The economy is booming,'' said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado. Englund correctly forecast third-quarter growth. ``As much as people may have been concerned about gas prices, consumers took the hit and now gas prices are falling.''

Stocks rose after the report showed a growing economy with tame inflation. A measure of inflation watched by Federal Reserve policy makers rose at the slowest pace since the second quarter of 2003. The Standard & Poor's 500 Index rose 0.6 point, or 0.1 percent, at 10:20 a.m. in New York.

`Very Good News'

Manufacturing in the Chicago area expanded for a third straight month in November, the National Association of Purchasing Management-Chicago said today. The group's index, based on a survey of executives in the region, fell to 61.7 from October's 62.9. Readings higher than 50 signal growth and the November figure exceeded the 60.5 average for this year. A measure of orders backlogs was the highest since July 1994.

Treasury Secretary John Snow heralded the GDP report as ``very good news for American workers and those looking for jobs,'' even as a recent poll showed many Americans still perceive the economy as weak. A survey released Nov. 28 by the Manchester, New Hampshire-based American Research Group found that 43 percent of those questioned said the economy was in a recession, while 44 percent said it wasn't.

The economy probably created 210,000 jobs in November and the unemployment rate likely held at 5 percent, according to a survey of economists before a Labor Department report Dec. 2.

Economists forecast a 4 percent gain in GDP last quarter, according to the median estimate of 67 estimates in a Bloomberg News survey. Estimates ranged from 3.3 percent to 4.4 percent.

Corporate Profits

The wrath of Hurricane Katrina, which struck the Gulf Coast on Aug. 29, took a toll on corporate profits during the quarter. Earnings adjusted for the value of inventories and depreciation of capital expenditures, or profits from current production, fell $45.5 billion, or 3.4 percent, compared with a 4.6 percent gain in the second quarter.

Profits were reduced by $151.2 billion at an annual rate in the third quarter because of an increase in payouts by insurance companies and uninsured losses of corporate property due to hurricanes.

Adding this amount back in, corporate profits would have increased almost 8 percent, according to economists at Bear, Stearns & Co. and MFR Inc.

``Underlying corporate profitability remained quite strong in the third quarter even as the effects of the hurricanes hit the headline numbers,'' said Joshua Shapiro, chief U.S. economist at MFR in New York.

The government's personal consumption expenditures price index, a measure of prices tied to consumer spending, rose 3.6 percent, compared with a 3.7 percent rise reported last month and a 3.3 percent second-quarter gain.

Confidence and Orders

The index excluding food and energy, a measure favored by Fed policy makers, rose at a 1.2 percent annual rate. The government reported a 1.3 percent third-quarter rise last month, and a second-quarter increase of 1.7 percent.

Reports yesterday showing higher consumer confidence, new home sales and durable goods orders supported forecasts that central bankers will keep raising interest rates to ensure inflation doesn't accelerate.

GDP rose to $11.2 trillion when annualized and adjusted for inflation. Without adjustment, the economy grew at a 7.4 percent annual pace to $12.6 trillion for the quarter.

Business inventories fell at a $13.4 billion annual rate, compared with a $16.6 billion pace of reduction previously reported and a $1.7 billion rate of decrease in the prior quarter. Inventories subtracted 0.44 percentage points from growth in the third quarter.

Corporate Spending

Corporate spending will probably help power the economy this quarter and next year, economists said. Economists at Morgan Stanley yesterday boosted their forecast for economic growth this quarter to a 3.8 percent annual rate from 3.1 percent after the durable goods report showed an increase in sales of business equipment and a rise in inventories.

Current-production cash flow, or the internal funds available to companies for investment, rose 2.7 percent in the third quarter compared with 3.4 percent in the second quarter.

Business fixed investment, which includes spending on commercial construction as well as on equipment and software, rose at an 8.8 percent annual rate for a second straight quarter. The government estimated last month that such investment rose at a 6.2 percent pace.

Spending on equipment and software rose at a 10.8 percent annual rate, compared with the 8.9 percent previously reported.

Consumers

Residential construction rose at an 8.4 percent annual rate in the third quarter, compared with 4.8 estimated last month and a 10.8 percent gain in the second three months of the year.

Consumer spending, which accounts for about 70 percent of the economy, expanded at a 4.2 percent annual pace, compared with 3.9 percent estimated in October and a 3.4 percent pace for the second quarter. The median estimate in a Bloomberg survey of economists was 3.9 percent.

The data ``suggest there was a bit more spending momentum at the end of the quarter than previously thought,'' according to an e-mail from economists at Nomura Securities International Inc. Depending on tomorrow's release of October spending figures, ``these data may lead us to raise our forecast of fourth-quarter growth, which we currently peg at 2.5 percent.''

The gain in consumer spending was paced by auto sales in July, which rose at the second-fastest pace on record after Ford Motor Co. and DaimlerChrysler AG's Chrysler unit matched General Motors Corp.'s offer to extend employee discounts to all buyers. Vehicle purchases sagged in August and September.

Holiday Sales

The revised figures showed consumers spent more on non- durable goods and services in the second quarter than the government first reported.

Wal-Mart Stores Inc., the world's largest retailer, expects a ``very good'' holiday sales season, helped by an expanded selection of electronics and the new Metro 7 apparel line, Vice Chairman John Menzer said Nov. 28. Wal-Mart is based in Bentonville, Arkansas.

The retail price of gallon of regular unleaded gasoline reached $3.069 the week ended Sept. 5, according to figures from the Energy Department. Pump prices have since fallen 30 percent.

A bigger trade gap restrained growth in the quarter. The gap subtracted 0.25 percentage points to GDP. In the initial estimate, the government reported that trade added 0.8 percentage point to economic growth.

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Consumer Spending Up, Construction at High

$this->bbcode_second_pass_quote('', '
')Thursday, December 1, 2005
WASHINGTON - Personal spending edged up modestly in October although retailers are hoping that higher consumer confidence and lower energy prices will yield bigger gains during the holiday shopping season.

The Commerce Department reported that personal spending rose by 0.2 percent in October, a slowdown from a 0.5 percent increase in September but better than the 0.5 percent decrease recorded in August. Spending for the past three months has slowed considerably after sizable gains in June and July as consumers rushed to take advantage of attractive discounts that automakers were offering to boost car sales.

Incomes were up 0.4 percent in October after two months in which that indicator of business health had been skewed by the impact of the property destruction caused by hurricanes Katrina and Rita. Economists believe an improving jobs picture will bolster incomes further in the months ahead and put consumers in a shopping mood for the holiday season.

But the nation's retailers reported on Thursday that they had a mixed start to the holiday shopping season. The biggest winners were stores that heavily discounted over the Thanksgiving weekend including Wal-Mart Stores Inc. and mid-priced department stores such as J.C. Penney Co. Inc.

A closely followed gauge showing the health of the manufacturing sector posted a reading of 58.1 in November. The Institute for Supply Management's manufacturing index was down slightly from the October reading of 59.1 but still in a range that indicates an improving manufacturing sector.

In other economic news, the Commerce Department said that construction spending rose a solid 0.7 percent in October to an all-time high of $1.05 trillion at a seasonally adjusted annual rate.

The better-than-expected gain followed a more modest 0.2 percent September increases. It was propelled by a 0.6 percent rise in residential construction and a 1.9 percent jump in public construction, both of which rose to record highs. Building activity, however, is expected to slow in coming months as rising mortgage rates dampen the red-hot housing market.

Meanwhile, the Labor Department said the number of hurricane-related job losses totaled just 9,600 last week, down significantly from the 21,000 storm-related jobless claims filed the previous week. The new storm claims pushed the total number of Americans who have lost their jobs because of Katrina, Rita and Wilma to 592,000.

The 9,600 storm claims came out of an overall total of 320,000 new claims for unemployment benefits filed last week, a figure that was down by 17,000 from the previous week. This indicates continued improvements in the labor market.

Economists closely watch the performance of consumer spending since it accounts for two-thirds of the total economy. The small 0.2 percent gain for October got the fourth quarter off to a modest start following growth in the overall economy at a sizzling rate of 4.3 percent in the July-September quarter, according to a revised estimate of the gross domestic product released on Wednesday.

Many economists believe the GDP growth rate will slow in the October-December period to between 3 percent and 4 percent, which would still be a solid performance, especially in light of the blows the economy has taken this year from the destruction from the Gulf Coast hurricanes and a surge in energy prices. But they said a lot will depend on holiday shopping.

"We still haven't seen any major rebound in spending, though improving wage and salary gains means consumers do have the ability to pick up the pace," said Joel Naroff, chief economist at Naroff Economic Advisors, a research firm in Holland, Pa.

An inflation gauge tied to the consumer spending report showed prices, excluding food and energy, rose by just 1.8 percent in the 12 months ending in October, the slowest pace since a 1.6 percent year-over-year rise in February 2004.

Economists are hoping that a retreat in gasoline prices from the record highs set in early September will help lift consumer spirits about purchases for Christmas.

The outlook for the holiday shopping season got a boost earlier this week when the Conference Board reported that consumer confidence rebounded sharply in November to a reading of 98.9, compared to 85.2 in October.

The income and spending report said that the 0.4 percent rise in incomes in October followed a huge 1.7 percent surge in September and a 1 percent plunge in August. But the August and September figures were heavily influenced by insurance payments from the hurricanes.

[Falstaff]

Here in Folsom, CA there certainly seems to be NO end in sight for the "suburban" sprawl that upset Kuntsler so much..

Developement as far and as fast as the eye can see!

So when's all this supposed to collapse there Jimmy boy?

[jaws]

That's the usual consequence of an inflationary boom. Next comes the usual consequence of inflationary bust.

[emersonbiggins]

Which printer do you think the feds prefer to print their money?
Personally, I like this HP plotter below, which prints out 24 bills of any denomination per linear foot.

[FoxV]

and just a few days ago I was reading on how home sales are down, and the number of houses available for sale is at a 20 year high (Reuters article)

and here we have mention that although new home sales are up, the number of unsold new homes is at a record level (yahoo finacial article)

And I also just read a few days ago about how inflation and GDP where up so rate hikes till the spring are pretty much guaranteed (sorry no link)

Can we say "Overshoot"

But hey, that's so yesterday. Today we're booming

[joewp]

Gee, IIRC, the US pumped more oil than any other year in 1970, the year we peaked. If there's going to be a housing crash, the bubble has to get real big, right before it starts down.

[Colorado-Valley]

Onward Vulgaria!

[o2ny]

A comment on Kunstler's blog sums it up for me...

$this->bbcode_second_pass_quote('', 'T')he giant exurban McMansions are bad, but what about all those giant condo blocks going up in the less (if that's possible) desirable wastelands? This is something that gets overlooked. Sneering at the vulgarian McMansions is righteous fun, but what about those who can't afford cool urban living or the Disneyland fortresses and end up having to live out there because that's all they can afford? They have all the problems of being stuck 20 miles from the nearest store without the supposed benefits of a classy palatial dwelling, and probably don't have three Ford Explorers parked outside to whisk them away to WalMart.

Last Monday's Austin American Statesman had an interesting piece on the fate of New Orleans evacuees who had been relocated to such places around Austin and were already feeling trapped:

http://www.statesman.com/metrostate/con ... acuee.html

"Peering out from a white-fenced balcony that looks out on nothing much, Katrina evacuee Stephanie Gleason said, 'To tell the truth, I don't know where we live.'

"There is no bus stop here. The nearest supermarket is a $20 cab ride away.

"Gleason's cookie-cutter apartment complex, Eagles Landing, feels more like a bird cage than a nest.

"Flushed out of their city — one of the most dense and most vibrant in the country — many of the New Orleanians who came here car-less find themselves living amid Austin's car-enabled sprawl.

"As many as 7,300 hurricane evacuees are now in the Austin area, and many live along the city's newest fringes in apartment complexes that, for the very reason of their remoteness, had vacancies before the evacuees came along."

Exurban hell ain't just for the vulgar rich, you know....

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U.S. Added 215,000 Jobs Last Month, Most Since July (Update4)

Dec. 2 (Bloomberg) -- The U.S. economy added 215,000 jobs in November, bouncing back from two months of weak employment growth triggered by Hurricanes Katrina and Rita.

The payroll gain was the biggest since July and almost five times the October increase, the Labor Department said today in Washington. The unemployment rate held at 5 percent, in line with the average over the last decade.

Increased hiring may fuel stronger consumer spending and keep the Federal Reserve raising rates to head off a quickening of inflation, economists said. Workers earned 3.2 percent more last month than in November 2004, the biggest year-over-year increase since March 2003, suggesting wage gains may lead companies to raise prices.

``We're back in very good shape,'' said Richard DeKaser, chief economist at National City Corp. in Cleveland, who predicted a 219,000 gain. ``We're right at full employment, and the fact we're seeing compensation gains reinforces that. This is what's going to continue to motivate the Fed to raise rates.''

Economists forecast payrolls would rise by 210,000 in November, the median estimate in a Bloomberg News survey where predictions ranged from 145,000 to 350,000. The jobless rate, which the department determines through a sampling of households instead of employers, was expected to hold at 5 percent.

The economy ``has delivered a solid performance thus far in 2005,'' Fed Chairman Alan Greenspan said in a videotaped speech prepared for a Philadelphia Fed bank conference today. Even after the hurricanes, ``economic activity appears to be expanding at a reasonably good pace as we head into 2006.''

Revisions

The benchmark 10-year note fell 1/16, pushing the yield up 1 basis point to 4.52 percent at 11:55 a.m. in New York.

September's jobs figure was revised to a 17,000 gain from an 8,000 decline, and October's was lowered to 44,000 from 56,000. The hurricanes triggered a surge in energy prices that temporarily discouraged companies outside the Gulf Coast region from hiring.

Service industries, which include retailers, banks and government agencies, added 165,000 jobs last month after a decline of 10,000 in October. Manufacturers created 11,000 jobs after a 15,000 gain in October, the biggest consecutive increase since May 2004. Economists expected the number of factory jobs to rise by 5,000, according to the Bloomberg survey.

Faster Growth

The improved jobs picture follows a report this week that showed the economy grew at a faster than expected 4.3 percent annual rate from July through September, a quarter that included the two hurricanes. Consumer spending, which accounts for about 70 percent of the economy, expanded at a 4.2 percent annual rate.

``We have every reason to be optimistic about our economic future,'' President George W. Bush said at the White House in Washington after today's report. ``Our economic horizon is as bright as it's been in a long time.''

Yesterday, Bush's economic advisers said growth will slow to 3.4 percent next year from 3.5 percent this year as interest rates rise. Job growth next year will average 176,000 workers a month in 2006, the advisers predicted.

Retailers

Retailers, who typically hire more workers during November to prepare for holiday sales, added 8,500 jobs last month, about three times more than in October. Temporary-help agencies added 5,200 workers.

Coach Inc., the largest U.S. seller of luxury leather goods, added about 3,500 holiday sales workers this year, 500 more than in 2004, said Michael Tucci, director of North American retail. Part of the additional hiring was because the company opened about 25 new stores this year.

U.S. retailers recorded sales of $27.8 billion from Nov. 25 to Nov. 27, the first official holiday weekend this year, pushing the industry toward its second-biggest selling season since 1999. The stronger-than-expected receipts may encourage stores to hire more seasonal staff, said Dan Butler, vice president of retail operations for the National Retail Federation.

``I would look for retailers to be possibly hiring a few more people in the last stretch and to stretch the hours of existing employees just to cover additional sales,'' he said.

Construction

Employment at construction firms increased 37,000. Construction jobs may rise further as rebuilding from Hurricanes Katrina, Rita and Wilma continues in the Gulf Coast and Florida.

``It shows hurricane recovery boosted jobs-growth above trend,'' said Ellen Beeson Zentner, an economist at Bank of Tokyo-Mitsubishi Ltd in New York. ``If you took out the construction and factory jobs created by the hurricane recovery, you would probably come in at trend growth of about 180,000.''

Higher oil and gasoline prices as a result of Katrina and Rita may have weighed on some companies' ability to hire. The number of continuing jobless claims filed in the week ended Nov. 19 was close to the one-year high of 2.87 million in the week ended Sept. 23.

General Motors Corp. and Ford Motor Co. announced job cuts in November that may hurt manufacturing payroll reports in coming months. GM, the biggest U.S. automaker, said Nov. 21 it would close 12 plants and eliminate 30,000 jobs by 2008 to cut costs. Ford plans to eliminate 4,000 North American salaried jobs by the end of the first quarter.

Factory Workweek

The manufacturing workweek declined by 12 minutes to 40.8 hours and overtime fell by 6 minutes to 4.5 hours..

Average weekly hours for production workers fell 6 minutes to 33.7 hours. Economists surveyed by Bloomberg expected the workweek to hold at 33.8 hours.

Income data was mixed. Workers' average hourly earnings rose to 3 cents to $16.29, a 0.2 percent increase that matched the median forecast. The earnings data is for non-supervisory production workers, which account for 80 percent of payroll employment. Average weekly earnings fell to $549.98 from $550.60 in October. Compared with a year ago, weekly earnings were up 3.2 percent.

``Several districts reported signs of tightening in labor markets and some difficult in finding workers for certain occupations,'' the Federal Reserve said Nov. 30 in its regional survey of businesses by the 12 Fed district banks.

Fed policy makers are concerned about tightening in the labor market because it could lead to wage inflation. The Fed's Open Market Committee is expected to raise the benchmark overnight bank lending rate by 0.25 percentage point to 4.25 percent when it next meets on Dec.13, to stem higher inflation. It would be the 13th consecutive quarter-point increase.

Unemployment Rates

``You see companies now beginning to dust off employee retention programs,'' Carl Camden, president and chief operating officer of Troy, Michigan-based Kelly Services Inc., the second- largest U.S. temporary employment agency. ``It's still relatively easy to find employees, but it's tightening.''

The labor force participation rate, which measures how much of the eligible U.S. workforce has a job or is seeking one, held at 66.1 percent, close to the 17-year low of 65.8 percent recorded in March, the Labor Department said today.

Among blacks, the unemployment rate rose to 10.6 percent from 9.1 percent in October, today's report showed. The jobless rate for Hispanics increased to 6 percent from 5.8 percent and for whites fell to 4.3 percent from 4.4 percent.

Unemployment among teenagers rose to 17.2 percent from 15.9 percent. The jobless rate held at 4.6 for women and 4.3 percent for men.

``This is one more piece of evidence suggesting the economy has very strong momentum,'' said Nariman Behravesh, chief economist at Lexington, Massachusetts-based Global Insight, who correctly predicted the November gain.
_________________

[FoxV]

$this->bbcode_second_pass_quote('sf3006', 'W')orkers earned 3.2 percent more last month than in November 2004...

Consumer spending, which accounts for about 70 percent of the economy, expanded at a 4.2 percent annual rate...

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Bush Says Americans Have `Every Reason' for Optimism on Economy

Dec. 2 (Bloomberg) -- U.S. President George W. Bush, seeking to reassure Americans about the economy's strength even as the nation remains at war, said he has ``every reason'' to be optimistic that growth will remain robust.

``We have every reason to be optimistic about our economic future,'' Bush said at the White House in Washington after the Labor Department said 215,000 jobs were created in November and the unemployment rate held at 5 percent. ``Our economic horizon is as bright as it's been in a long time.''

Low inflation, a ``strong'' housing market, rising consumer confidence, gains in worker productivity and a ``vibrant'' small-business sector are fueling growth in the world's largest economy, he said.

It was the second time this week Bush praised the strength of the economy at a time when his job approval rating is hovering near record lows and concern is growing in Congress about the war in Iraq.

The November jobs gain was biggest monthly total since July and showed hiring rebounded from weak numbers in September and October, when hiring plans were disrupted and workers were scattered in the U.S. Gulf Coast region after Hurricanes Katrina and Rita.

Yesterday, Bush's economic advisers said U.S. economic growth will slow to 3.5 percent this year and 3.4 percent in 2006 as interest rates rise. Job growth next year will average 176,000 workers a month in 2006, the White House said, above the average of the past two decades of 149,000.

[pup55]

Yes, indeed, it is a golden age.

We know there were 14 new Walmart Supercenters opening in November, with an average employment of 250 each.

Walmart Store Openings

Also, Halliburton Corp has at least 500 openings, and this is just in the US. I am sure if you are willing to travel, it's even easier to get a job.

Halliburton Job Openings

and Lockheed has at least 2000 openings in Texas, Florida, and California:

Lockheed

[GoIllini]

$this->bbcode_second_pass_quote('sf3006', 'U').S. Economy Expanded at a 4.3% Pace in Third Quarter (Update3)

Nov. 30 (Bloomberg) -- The U.S. economy grew at a 4.3 percent annual rate from July through September, the quickest since the first quarter of last year and evidence of resilience in the face of record energy costs.

The revised figure for gross domestic product, the value of all goods and services produced in the U.S., was higher than economists forecast and compares with a 3.8 percent pace initially estimated, the Commerce Department's figures showed today. Growth was 3.3 percent in the prior three months.

Stronger demand and declines in inventories will keep factories humming, providing fuel for an economy that's grown in excess of 3 percent for 10 straight quarters, the longest such streak since 1986. Consumer spending, construction and business investment were more robust than the government first estimated.

``The economy is booming,'' said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado. Englund correctly forecast third-quarter growth. ``As much as people may have been concerned about gas prices, consumers took the hit and now gas prices are falling.''

Stocks rose after the report showed a growing economy with tame inflation. A measure of inflation watched by Federal Reserve policy makers rose at the slowest pace since the second quarter of 2003. The Standard & Poor's 500 Index rose 0.6 point, or 0.1 percent, at 10:20 a.m. in New York.

`Very Good News'

Manufacturing in the Chicago area expanded for a third straight month in November, the National Association of Purchasing Management-Chicago said today. The group's index, based on a survey of executives in the region, fell to 61.7 from October's 62.9. Readings higher than 50 signal growth and the November figure exceeded the 60.5 average for this year. A measure of orders backlogs was the highest since July 1994.

Treasury Secretary John Snow heralded the GDP report as ``very good news for American workers and those looking for jobs,'' even as a recent poll showed many Americans still perceive the economy as weak. A survey released Nov. 28 by the Manchester, New Hampshire-based American Research Group found that 43 percent of those questioned said the economy was in a recession, while 44 percent said it wasn't.

The economy probably created 210,000 jobs in November and the unemployment rate likely held at 5 percent, according to a survey of economists before a Labor Department report Dec. 2.

Economists forecast a 4 percent gain in GDP last quarter, according to the median estimate of 67 estimates in a Bloomberg News survey. Estimates ranged from 3.3 percent to 4.4 percent.

Corporate Profits

The wrath of Hurricane Katrina, which struck the Gulf Coast on Aug. 29, took a toll on corporate profits during the quarter. Earnings adjusted for the value of inventories and depreciation of capital expenditures, or profits from current production, fell $45.5 billion, or 3.4 percent, compared with a 4.6 percent gain in the second quarter.

Profits were reduced by $151.2 billion at an annual rate in the third quarter because of an increase in payouts by insurance companies and uninsured losses of corporate property due to hurricanes.

Adding this amount back in, corporate profits would have increased almost 8 percent, according to economists at Bear, Stearns & Co. and MFR Inc.

``Underlying corporate profitability remained quite strong in the third quarter even as the effects of the hurricanes hit the headline numbers,'' said Joshua Shapiro, chief U.S. economist at MFR in New York.

The government's personal consumption expenditures price index, a measure of prices tied to consumer spending, rose 3.6 percent, compared with a 3.7 percent rise reported last month and a 3.3 percent second-quarter gain.

Confidence and Orders

The index excluding food and energy, a measure favored by Fed policy makers, rose at a 1.2 percent annual rate. The government reported a 1.3 percent third-quarter rise last month, and a second-quarter increase of 1.7 percent.

Reports yesterday showing higher consumer confidence, new home sales and durable goods orders supported forecasts that central bankers will keep raising interest rates to ensure inflation doesn't accelerate.

GDP rose to $11.2 trillion when annualized and adjusted for inflation. Without adjustment, the economy grew at a 7.4 percent annual pace to $12.6 trillion for the quarter.

Business inventories fell at a $13.4 billion annual rate, compared with a $16.6 billion pace of reduction previously reported and a $1.7 billion rate of decrease in the prior quarter. Inventories subtracted 0.44 percentage points from growth in the third quarter.

Corporate Spending

Corporate spending will probably help power the economy this quarter and next year, economists said. Economists at Morgan Stanley yesterday boosted their forecast for economic growth this quarter to a 3.8 percent annual rate from 3.1 percent after the durable goods report showed an increase in sales of business equipment and a rise in inventories.

Current-production cash flow, or the internal funds available to companies for investment, rose 2.7 percent in the third quarter compared with 3.4 percent in the second quarter.

Business fixed investment, which includes spending on commercial construction as well as on equipment and software, rose at an 8.8 percent annual rate for a second straight quarter. The government estimated last month that such investment rose at a 6.2 percent pace.

Spending on equipment and software rose at a 10.8 percent annual rate, compared with the 8.9 percent previously reported.

Consumers

Residential construction rose at an 8.4 percent annual rate in the third quarter, compared with 4.8 estimated last month and a 10.8 percent gain in the second three months of the year.

Consumer spending, which accounts for about 70 percent of the economy, expanded at a 4.2 percent annual pace, compared with 3.9 percent estimated in October and a 3.4 percent pace for the second quarter. The median estimate in a Bloomberg survey of economists was 3.9 percent.

The data ``suggest there was a bit more spending momentum at the end of the quarter than previously thought,'' according to an e-mail from economists at Nomura Securities International Inc. Depending on tomorrow's release of October spending figures, ``these data may lead us to raise our forecast of fourth-quarter growth, which we currently peg at 2.5 percent.''

The gain in consumer spending was paced by auto sales in July, which rose at the second-fastest pace on record after Ford Motor Co. and DaimlerChrysler AG's Chrysler unit matched General Motors Corp.'s offer to extend employee discounts to all buyers. Vehicle purchases sagged in August and September.

Holiday Sales

The revised figures showed consumers spent more on non- durable goods and services in the second quarter than the government first reported.

Wal-Mart Stores Inc., the world's largest retailer, expects a ``very good'' holiday sales season, helped by an expanded selection of electronics and the new Metro 7 apparel line, Vice Chairman John Menzer said Nov. 28. Wal-Mart is based in Bentonville, Arkansas.

The retail price of gallon of regular unleaded gasoline reached $3.069 the week ended Sept. 5, according to figures from the Energy Department. Pump prices have since fallen 30 percent.

A bigger trade gap restrained growth in the quarter. The gap subtracted 0.25 percentage points to GDP. In the initial estimate, the government reported that trade added 0.8 percentage point to economic growth.

[julianj]

And there are lots of openings for Halliburton and KBR workers,

$100K a year

well paid jobs too.

In Iraq.



Where does the money come to pay them I wonder

[threadbear]

Enthusiasm about a growing economy, at this point, is like excitement about a metastasizing tumour.

[sampo]

Not so fast buddy:

Exactly How Strong Was That Jobs Report?

According to the Economic Policy Institute, of the 215,000 jobs that the Labor Department reported being added in the month of November, nearly 77% of them were in services (165,000), of which nearly 40,000 of that was in food services.

As to be expected, there was also an increase in construction, arising in part from the post-Katrina reconstruction boom in the South.

And there was an expected uptick in retail hiring heading into the holiday season.

However, manufacturing went up only 26,000 jobs in the last two months.

Note this also:

$this->bbcode_second_pass_quote('', 'W')age growth also accelerated, though it remains below the rates of inflation that have prevailed in recent months. On a yearly basis, hourly wages are up 3.2%, the fastest yearly growth rate since March 2003. The most recent inflation reading, however, shows prices rising at 4.3% (from October 2004 to October 2005).

There are signs in today's report that suggest a weaker job picture than might be readily apparent from the common indicators. For example, average weekly hours were down by one-tenth of an hour (two-tenths for manufacturing), and were negative across most industries. At 33.7 hours per week for private-sector workers in blue-collar or non-managerial jobs, this measure of the strength of labor demand has remained unchanged over the past year, as well as over the recovery that began four years ago. In prior recoveries, average hours were up at this point.

The household survey also has some weak spots, especially regarding African Americans, whose unemployment rate jumped from 9.1% to 10.6%. That 1.5 percentage-point jump is the largest in the history of this series, which goes back to the early 1970s. It is difficult to know what caused this sharp spike. Employment in the notoriously volatile household survey fell in November by 52,000 overall and fell for blacks by 289,000, a result that is in stark disagreement with the more reliable establishment survey. This important indicator involves closer scrutiny in coming months.

Finally, last month represents the four-year mark in the recovery that began in November 2001. While job growth has been consistently positive since June 2003, among all recoveries that have lasted at least this long, the current one has been the worst on record (see the chart below). Over these years, the nation's payrolls have increased by 2.6%, well below the rate of the other recoveries that have lasted this long, including the 1990s recovery, which also began as "jobless."

[advancedatheist]

How much of this "growth" resulted from the "Broken Window" pseudo-prosperity caused by the hurricanes?

[emersonbiggins]

$this->bbcode_second_pass_quote('advancedatheist', 'H')ow much of this "growth" resulted from the "Broken Window" pseudo-prosperity caused by the hurricanes?