Great Economy

The story of the day is the US economy. Well, it should be. Our economy grew at 3.8% during the third quarter. That is great. Without hurricanes Katrina and Rita the rate would have been .5 to 1.0% higher; incredible! The growth was led by consumer spending. And the LA Times reports:

The Commerce Department's index of personal consumption expenditures — an inflation measure favored by Federal Reserve Chairman Alan Greenspan — rose at an annual rate of 3.7%. But without energy and food, the increase was only 1.3%, down from 1.7% in the second quarter.

There is bad news - wages didn't keep up; they lagged behind the low inflation by 1.5%. And personal savings went below zero! But the overall news is good. And inventories are declining, which indicates that production shouldn't decline. So another good quarter is expected.