#Consumer spending report contradicts gaudy economic growth numbers
zepp
Dow Up 35, Nasdaq Up 5 Despite Report
By THE ASSOCIATED PRESS
Published: October 31, 2003
Filed at 9:58 a.m. ET
NEW YORK (AP) -- Share prices rose sharply in early trading Friday
despite a government report that consumer spending had weakened in
September.
The Dow Jones industrial average advanced 34.59, or 0.35 percent, to
9,821.20.
The broader market also rose. The Nasdaq composite index increased
5.35, or 0.3 percent, to 1,938.04, while the Standard & Poor's 500
index rose 3.98, or 0.38 percent, to 1,050.92.
Before trading began, the government reported that consumers kept a
tighter grip on their wallets in September, trimming spending by 0.3
percent. Analysts had expected a 0.1 percent drop.
Still, Americans' incomes rose 0.3 percent in September for the third
month in a row, slightly better than the 0.2 percent increase analysts
had expected.
Heavy consumer spending in the summer months had helped boost the
nation's economic growth to 7.2 percent in the third quarter, the
strongest performance in nearly 20 years.
Companies reporting higher earnings were rewarded by investors.
Oil companies Anadarko Petroleum and ChevronTexaco Corp. reported
third-quarter earnings ahead of analysts' estimates. In early trading,
Anadarko shares were up 65 cents at $43.50, while ChevronTexaco
advanced $1.56, or more than 2 percent, to $73.32.
Health insurer Cigna Corp. also reported better-than-expected profits.
Its shares were up $6.13, or more than 12 percent, to $54.10.
The Russell 2000 index, which tracks smaller company stocks, was up
2.60, or 0.5 percent, to 532.97.
Overseas, Japan's Nikkei stock average closed Friday down 1.27
percent. In afternoon trading in Europe, France's CAC-40 was down 0.65
percent, Britain's FTSE 100 was off 0.37 percent while Germany's DAX
index was up 0.17 percent.
--
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very
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expenditures on armaments and military equipment. It pays without
discussion, it ruins itself, and that is an excellent thing for the
syndicates of financiers and manufacturers for whom patriotic terrors
are
an abundant source of gain.'
Anatole France
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coondawg
"zepp" <zeppn...@finestplanet.com> wrote in message
news:13v4qvc940bu6kvo4...@4ax.com...
zepp
<coon...@atnotspambi.com> wrote:
>um....no it doesn't. . .
Um, yes it does. How can you have economic growth if there is less
consumer spending in a consumer economy?
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coondawg
"zepp" <ze...@zeppscommentaries.com> wrote in message
news:4c75qv4an0qcbdie9...@4ax.com...
> On Fri, 31 Oct 2003 16:37:39 GMT, "coondawg"
> <coon...@atnotspambi.com> wrote:
>
> >um....no it doesn't. . .
>
> Um, yes it does. How can you have economic growth if there is less
> consumer spending in a consumer economy?
did you read the story you posted? no where does it say that the .2%
difference from projected drop in consumer spending to acctual does anything
to contradict the 7.2% GDP growth. the growth in buisness sector investment
in capital drove the numbers, not consumer spending.
gov spending was down 40 odd percent from the the 2nd qtr, does that mean
there was no growth in the economy either?
Arne Langsetmo
>
> "zepp" <ze...@zeppscommentaries.com> wrote in message
> news:4c75qv4an0qcbdie9...@4ax.com...
> > On Fri, 31 Oct 2003 16:37:39 GMT, "coondawg"
> > <coon...@atnotspambi.com> wrote:
> >
> > >um....no it doesn't. . .
> >
> > Um, yes it does. How can you have economic growth if there is less
> > consumer spending in a consumer economy?
>
> did you read the story you posted? no where does it say that the .2%
> difference from projected drop in consumer spending to acctual does anything
> to contradict the 7.2% GDP growth. the growth in buisness sector investment
> in capital drove the numbers, not consumer spending.
Nope. Top gains were in housing purchases and durable goods. Krugman
has pointed out that this is in part to people cashing in on low
interest rates, buying now while conditions are good. But that
can't be expected to continue, even if interest rates remain low.
Did _you_ read the article? This is what it said:
> > >> Heavy consumer spending in the summer months had helped boost the
> > >> nation's economic growth to 7.2 percent in the third quarter, the
> > >> strongest performance in nearly 20 years.
Now who's the doofus around here?
Cheers,
-- Arne Langsetmo