russotto writes:
Quote:
|
There's no real sign of corporate spending.
|
The BBC writes:
Quote:
|
Business investment was up 11.1% in the quarter, driven by growth of more than 15% over the previous year in spending on equipment and computer software - although companies still seemed wary of building up stocks, demonstrating some caution about future prospects.
|
I showed the entire paragraph to both counter and illustrate your point. While business has continued to invest in capacity, it appears to be reluctant to invest in inventory. Wisely so, I would say - until, that is, both consumer spending and consumer confidence increase. The econ reports we just received indicate that both consumer barometers have now increased substantially and we are heading into a big spending quarter (Christmas season). We shall see if business increases inventory in recognition of the latest consumer spending pattern and in anticipation of a big spending Q4.
I am painfully and personally aware of the unemployment rate (6.2%) which is entirely incompatible with a 7+% annual GDP growth rate. In pulling out of an economic downturn, all unused productivity and capacity must first be exhausted before job growth occurs. I have to think that capacity and productivity are maxed out and that job creation is around the corner. We shall see. I can tell you that while Fortune 500 layoffs make lots of news, the real employment situation is more closely corellated with the employment needs of small business.
And, the article also indicated a shrinking trade deficit. That cash goes straight to the "bottom line" of the economy by increasing the money supply dollar for dollar.
I'm reluctant to believe that this "growth" will be revised out in a month. Even if it is taken down a notch, its still very encouraging.
edited to clarify what growth rate the 7+% referred to: GDP. No other changes