Tuesday, November 22, 2005

Good News - Strong Economy

Last year our economy grew by 4.2%. That is a great number for any mature economy. Only developing nations do better. The 3d quarter of 2005 our economy grew by 3.8%. That is strong growth and it's good for everyone. (Blame Bush.) And it is the period where we suffered through major hurricanes that greatly reduced our oil production, transportation, and refining. That had the double cost - the direct costs of damage and huge costs of the disruptions to our economy, includuding oil above $70 a barrel. The generic Open Source Media has the story:
Despite turbulence from hurricanes and high energy prices, the economy is expected to log respectable growth this year and next, business economists say. The economy, as measured by gross domestic product, is projected to grow by 3.6 percent for all of 2005 and 3.3 percent in 2006, according to the National Association for Business Economics.
And this growth is also despite the Fed raising interest rates, which tend to slow things down.
To tamp down inflation fears, the Fed in early November raised a key interest rate by one-quarter percentage point to 4 percent, the 12th increase of that size since June 2004. Another quarter-point bump-up is expected on Dec. 13, the Fed's last scheduled meeting of this year. Economists expect more rate increases to follow in 2006. The still-solid economic growth expected for this year and next should help the national employment climate, which was rocked by the hurricanes. The nation's unemployment rate, which stood at 5.5 percent in 2004, should drop to 5.1 percent this year and then dip to 5 percent next year, according to the group's projections.

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