Good signs

Tuesday, December 2, 2003

Over the weekend, area stores were packed with serious buyers as the start of the Christmas shopping season officially kicked off Friday. Retailers are expecting their most profitable holiday season in four years.

The Washington-based National Retail Federation predicts total holiday sales to be up 5.7 percent to $217.4 billion from last year. That compares with a modest 2.2 percent increase in 2002.

That's good economic news for retailers, but there are more broad-based reasons for optimism. Other recently released economic indicators have been extremely favorable. It seems the economy is enjoying a sustainable rebound.

Here's a breakdown of the latest numbers:

The broadest measure of the economy's performance, gross domestic product, shot up 8.2 percent, the fastest increase in two decades. The new GDP -- which measures the values of all goods and services produced within the United States -- shows the strongest growth since the first quarter of 1984. The new estimate is more than double the 3.3 percent rate in the second quarter.

Consumer confidence also jumped 10 points last month. Consumers boosted spending in the third quarter at a 6.4 percent rate, up from a 3.8 pace in the second quarter.

Businesses are doing their part to improve the economy, too. Business spending, a troubling indicator for the past few years, went up 18.4 percent last quarter. Businesses are investing in new equipment and software, a sure sign of economic growth.

They've also hired more employees. The unemployment rate continues to improve, and the economy has added jobs for a third straight month.

Corporations reported profit for the last quarter was up 11.6 percent, the largest increase in 11 years. And orders for big-ticket durable goods went up 3.3 percent in October, the largest increase in more than a year.

Spending on residential projects grew at a huge 22.7 percent pace in the third quarter. There has been slightly stronger spending by state and local governments, too.

Future signs look good too. For this quarter, experts believe that the economy is growing at a slower but still healthy rate of about 4 percent in the current October-to-December period. That's especially impressive considering that President Bush's third round of tax cuts and a wave of mortgage refinancing are beginning to fade.

After a couple of years of damaging news, these several rounds of good news are cause for celebration. As one economist joyously put it, "The economy is back."

The economy is regaining the confidence of businesses and consumers, and the numbers offer real reasons for optimism.

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