Economic growth still the same as predicted
February 29, 2008
On the 28th of February when a revised evaluation on the GDP came out, it showed that the growth rate of the US economy which was predicted in the last quarter is going to remain the same. The growth rate which was announced earlier was of almost 0.6 percent.
Gross Domestic Product is the widest measure of a country’s economic activity. The Commerce Department on Thursday said that the Gross Domestic Product after getting adjusted for inflation is going to be at an annual rate of 0.6 percent in the last quarter. The results of the announcement that came out on the 28th were in line with the estimates that were released late in the month of January. Even though the rate has managed to stay at the same position without slipping further below, this rate is still way below the finishing reading in the third quarter. The final reading in the third quarter was 4.9 percent annual rate.
The various economists of the nation who were surveyed said that they had expected the revised reading to show that the economy had grown at an annual rate of 0.8 percent in the final quarter. However there are quite a lot of positive things that can be inferred from the revised report.
Some of the positive signs are that the alterations in the non-farm catalog sheared off almost 1.4 percentage points of the total predicted growth. This was more than the prediction in the previous report where it had said that the percentage point was going to be 1.2 percent.
Many of the surveyed economists were of the opinion that the economy was stronger than what most people were thinking. True that the numbers in the various economic reports that are coming out are not all that great, but the economy is managing to stay in a fixed position without slipping further. The economist say that the numbers in the revised inventory hints that the real Gross Domestic Product growth rate was up from the previously forecasted 1.8 percent to 2 percent.
Other economists said that the boost in the inventory insolvency indicates that the business sector will pick up on its production during the first quarter to refill those inventories. This would then provide for the first quarter to show some signs of positive growth. But most of the economists who were surveyed said that the country’s economy is going to grow at a very slow pace indeed. Although most of them were of the view that USA would be able to stay clear of any recession.
Another interesting thing that was there in the report was that it showed a mixed view for inflation in the previous quarter. The Federal Reserve has cut the interest rates several times after September. While many economists are of the view that the Fed must slash the rates further to improve the current economic condition, many others are of the view that further key interest rate cuts would result in the nation going into an inflation.
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