Tuesday, October 31, 2006
Economy weakest in last three years
Economic growth is at its slowest pace in more than three years. In the third qurter of 2006 the nations GDP grew at a pace of 1.6%. Down from the 2.6% growth experienced in the second quarter. GDP(Gross Domestic Product) is the governments main gauge of economic strength and performance. Analyst were expecting a growth of 2.1% over the third quarter, but actual economic growth came in much lower than forcasted. The weak third quarters performance was due in part to a rising trade gap which subtracts from GDP, as well as the slump in the nation's housing market. However an article I read on CNN.com suggests that the economy is poised to bounce back, with the help of lower energy costs. Chris Isidores states "the slower growth, and a price reading in the report that showed less inflation pressures than expected, raised hopes that the Federal Reserve could start to cut interest rates early next year, as the central bank tries to find the balance between economic growth and price stability." The fed will closely examine the supply of money and try to find the right interest rate to spur the economy, which will help growth over the fourth quarter. With elections coming up it will be interesting to see how this news will effect the races. With much of the political banter about the war in Iraq, this recent news should give the Democrats another great debate topic. With the stock market and employment rates remaining strong, it is probably easy for most American’s to believe the economy is in great shape. Many Democrats like Rep. Carolyn Maloney, D-N.Y., will argue that "Once again, the Bush economy is going in the wrong direction." What is yet to be seen is if this will have an impact on the near upcoming elections?