Subscribe free to our newsletters via your
. Earth Science News .

Subscribe free to our newsletters via your

US Economy Posts Robust Growth In Hurricane-Hit Quarter

US Treasury Secretary John Snow said that coming at a time of such natural disasters, the 3.8 percent growth rate was "truly outstanding".
By Jitendra Joshi
Washington (AFP) Oct 28, 2005
The US economy grew at a 3.8 percent rate in the third quarter, according to figures released Friday that surpassed expectations for a period that saw powerful hurricanes batter the US oil industry.

Wall Street was expecting gross domestic product in the world's biggest economy to expand by 3.6 percent in the July-September period, against 3.3 percent in the previous quarter.

The economy appears to have weathered the impact of hurricanes Katrina and Rita, which shut down much of US oil drilling and refining capacity when they swept through the southern United States in late August and September.

US Treasury Secretary John Snow said that coming at a time of such natural disasters, the 3.8 percent growth rate was "truly outstanding".

US GDP has now grown by 3.3 percent or more for 10 straight quarters, Snow noted.

"There can be no doubt that the American economy is an adaptive and resilient marvel, and one that has benefited greatly from good fiscal policies," he said in a statement.

But analysts, noting that the Commerce Department GDP release is only a preliminary figure, said that most of the hurricanes' effects will only come in fuller data for the month of September.

The Commerce Department is set to release a more comprehensive GDP report for the third quarter on November 30.

"The encouraging news is that we still don't have any evidence that higher energy prices are spilling over into other products," Nomura chief economist David Resler said.

"There's a good bit of momentum in the economy, but we're going to have to wait for the monthly consumer spending figures and (GDP) revisions to know more," he said.

The Commerce Department said the major contributors to growth over the July-September period were consumer spending, equipment and software, federal government spending, and the property market.

Those offset the negative impact on growth from companies investing less on their inventories, it said.

Immediately after Katrina flooded New Orleans and battered much of the rest of the US Gulf Coast, fears were expressed that the US economy could lurch into recession as petrol prices soared.

Those concerns would seem to have been overplayed, even if economists were wary of reading too much into the preliminary GDP release.

"Some recession," said analyst Dick Green.

"The rate of change in inventories will probably boost GDP numbers in the quarters ahead rather than subtract from it," he added.

Inflation cooled in the third quarter, despite the impact of high oil prices.

Core consumer prices increased at a 1.3 percent rate in the period, down from 1.7 percent before, the slowest quarterly increase since the second quarter of 2003.

But the core price index, which excludes energy and food prices, is still running at an annual rate of 1.9 percent, near the top of what is believed to be the Federal Reserve's comfort zone.

The US central bank meets on Tuesday and is expected to raise interest rates afresh to 4.0 percent in a continuing campaign to keep a lid on inflationary pressures.

"The Fed still has a green light to go ahead and raise rates for at least the next two meetings based on above-trend economic growth," Wachovia chief economist John Silvia said.

He predicted the third-quarter GDP figure would be revised down to about 3.5 percent once the full impact of the hurricanes is evaluated.

"But consumption, business, government and residential spending are all contributing to growth, and that won't change with any revisions. So that's very positive," Silvia said.

"You end up with an economy that has good forward momentum."

All rights reserved. 2004 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

Related Links
Search TerraDaily
Subscribe To TerraDaily Express

Florida Governor Bush Admits Wilma Relief Effort Weak
Miami (SPX) Oct 26, 2005
Victims of Hurricane Wilma's wrath in Florida pressured officials for relief Wednesday as they suffered a third day without electricity and scant basic supplies, while Governor Jeb Bush admitted the emergency relief effort "didn't work as it should."

Thanks for being here;
We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain.

With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords.

Our news coverage takes time and effort to publish 365 days a year.

If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.

SpaceDaily Contributor
$5 Billed Once

credit card or paypal
SpaceDaily Monthly Supporter
$5 Billed Monthly

paypal only

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

The content herein, unless otherwise known to be public domain, are Copyright 1995-2016 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement All images and articles appearing on Space Media Network have been edited or digitally altered in some way. Any requests to remove copyright material will be acted upon in a timely and appropriate manner. Any attempt to extort money from Space Media Network will be ignored and reported to Australian Law Enforcement Agencies as a potential case of financial fraud involving the use of a telephonic carriage device or postal service.