Friday, November 8, 2013

Global Impact: US Economy Increases 2.8% in Third Quarter, Not Enough to Increase Job Growth

According to The Latin American Tribune, the US economy expanded at an annual rate of 2.8% in the third quarter, up from 2.5% GDP growth between April and June, the US Commerce Department reported on Thursday (November 7).

Although economists expected a gdp of roughly 2%, the government mainly attributed the improved economic performance to a sharp gain in inventories and a narrowing of the trade deficit.

Consumer spending growth, nevertheless slowed to 1.5% from 1.8% in the previous quarter, the weakest result since 2011. Consumer spending accounts for roughly two-thirds of the US gdp.

COMMENT: Exports rose 4.6%, while investment in residential construction remained encouraging with growth of 14.6%.

Business investment, however, grew at a more moderate clip in the July-September period, climbing 1.6% compared to a 4.7% rise in the previous quarter.

Spending by local and state governments offset a fourth consecutive monthly drop in federal spending, which declined by 1.7%, largely attributed to the partial federal shutdown.

Unfortunately, although gdp of 2.8% in the US in the third quarter is encouraging, the reality is that roughly 50% of Americans are on some form of public assistance at a time when throughout most of the country employment remains flat, although within the Beltway (Washington DC metropolitan area) employment is booming, which is also a disturbing trend.

Tragically, one issue that has uniformly angered the majority of Americans is President Barack Obama's signature program, dubbed "Obama-care," whereby roughly a third of Americans are poised to have their health insurance cancelled because it is not meet the "standards" mandated by "Obama-care."

"Obama-care," at the moment, could produce 2014 as being the most painful Congressional election cycle on record for the Democratic Party.

Clearly, the US continues to struggle economically, yet the collective EU is essentially at zero growth.  To see counties that are doing better, see:

http://data.worldbank.org/indicator