April 29, 2004

Bush Boom: Best Economy in 20 Years

The economy hasn't seen a year of growth this good since 1984. The U.S. economy grew at a 4.2 percent seasonally adjusted annual rate in the first quarter, according to a Commerce Department estimate released today. That's the third straight quarter of growth above 4 percent, the first time in 10 years the economy grew faster than 4 percent for three straight quarters. GDPP grew 4.1 percent in the fourth quarter of 2003 and by 8.2 percent in the third quarter of 2003.

Over the past year, GDP is up 4.9 percent - the biggest yearly gain in 20 years.

According to the Commerce Department news release, the biggest contributors to the increase in GDP in the first quarter were personal consumption expenditures, equipment and software, government spending, exports, and private inventory investment. The first two - consumer spending remaining strong abd businesses investing more in equipment and software - are very important indicators of a strengthening economy.

Watch for the media and the Kerry campaign to spin the 4.2 percent GDP growth as bad news by pointing out that some economists had predicted GDP would grow 5 percent in the first quarter. Ignore the spin becuase the American economy is on a roll - and when the Commerce Department releases its final GDP figure for the third quarter in about a month (today's figures are merely the initial estimates) you likely will see the 4.2 percent figure revised higher.

By the way, the last time the economy was this good, an incumbent Republican president who was strong on national defense issues defeated a weak-on-defense tax-raising liberal Democrat from Massachusetts Minnesota.

UPDATE #1: Jobless claims dropped sharply last week, an indicator of strong jobs growth.

UPDATE #2: Word has it that John Kerry was momentarily happy about the strong economic growth before he became sad about it.