The U.S. economy performed better than previously thought during the third quarter of the year, while consumer confidence bounced back in November.
The U.S. Commerce Department reported on Tuesday the gross domestic product increased at a healthy 4% annual rate during the summer.
This latest reading, which is considered the best broad measure of the country?s economic heath, compares to a 3.1% growth rate estimated a month ago.
"The increase was due to increased spending reported for state and local governments, mostly school construction, single family homes, capital goods exports, consumer goods imports and, especially, inventory held by non-durable manufacturers and distributors," said Newport Communications Senior Economist Jim Haughey.
He said all of these revisions had previously been reported separately, so the large GDP revision was expected. The revised figure contained nothing surprising to affect truck equipment or freight.
"This continues the year-long pattern of economic growth alternating, quarter by quarter, between 1.5% and 4% growth," Haughey said. "It is likely to continue for two more quarters."
He is predicting current quarter GDP growth to be 1.5-2%, due to weak spending in September that got the fourth quarter started at a depressed level and created surplus consumer product inventories that are currently being absorbed by reducing production.
"This quarter will have a rising trend from October to December, setting up the first quarter of 2003 for 4% growth again," he said.
In a separate report from the private-research group The Conference Board, their Consumer Confidence Index rose from 79.6 in October to 84.1 in November, ending five straight months of declines.
Haughey noted consumer spending continued to rise during the five-month decline in the confidence index, except for the modest and brief spending decline in September.
“A small rise in the index signals only continued modest to average growth in spending,” he said. “Consumers have a better opinion of economic conditions in the future than in the present. This margin widened in November, probably because of the rising stock market and more international support for the U.S. demands on Iraq.”
Despite this better news, Haughey said the index remains very low for the current level of spending and month-to-month growth in spending.
“Consumers are cautious and concerned, ready to react quickly to bad news. It is the weak labor market that has consumers wary. They correctly sense that jobs are hard to get,” he said.
The U.S. Commerce Department reported on Tuesday the gross domestic product increased at a healthy 4% annual rate during the summer.
This latest reading, which is considered the best broad measure of the country?s economic heath, compares to a 3.1% growth rate estimated a month ago.
"The increase was due to increased spending reported for state and local governments, mostly school construction, single family homes, capital goods exports, consumer goods imports and, especially, inventory held by non-durable manufacturers and distributors," said Newport Communications Senior Economist Jim Haughey.
He said all of these revisions had previously been reported separately, so the large GDP revision was expected. The revised figure contained nothing surprising to affect truck equipment or freight.
"This continues the year-long pattern of economic growth alternating, quarter by quarter, between 1.5% and 4% growth," Haughey said. "It is likely to continue for two more quarters."
He is predicting current quarter GDP growth to be 1.5-2%, due to weak spending in September that got the fourth quarter started at a depressed level and created surplus consumer product inventories that are currently being absorbed by reducing production.
"This quarter will have a rising trend from October to December, setting up the first quarter of 2003 for 4% growth again," he said.
In a separate report from the private-research group The Conference Board, their Consumer Confidence Index rose from 79.6 in October to 84.1 in November, ending five straight months of declines.
Haughey noted consumer spending continued to rise during the five-month decline in the confidence index, except for the modest and brief spending decline in September.
“A small rise in the index signals only continued modest to average growth in spending,” he said. “Consumers have a better opinion of economic conditions in the future than in the present. This margin widened in November, probably because of the rising stock market and more international support for the U.S. demands on Iraq.”
Despite this better news, Haughey said the index remains very low for the current level of spending and month-to-month growth in spending.
“Consumers are cautious and concerned, ready to react quickly to bad news. It is the weak labor market that has consumers wary. They correctly sense that jobs are hard to get,” he said.
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