Wednesday, October 04, 2006

US Economy - Could It Maintain the 5.6% First Quarter Rate?

Indexes Gain For Week Reflecting Optimism On Growth Much ado about falling rates of expansion. But could the rate that existed in the first quarter be maintained? Of course not - the Fed wouldn't allow it. (Overheating and inflation and all those thing that the Fed worries about...)
The U.S. economy grew at an annualized pace of 2.6% in the second quarter, according to data released by the U.S. Bureau of Economic Analysis on Thursday. This is slower than the originally estimated 2.9% growth, while economists were also expecting an increase of 2.9%. In the first quarter, the U.S. economy expanded at a 5.6% rate.
5.6% is a rate that cannot be maintained - even if the Fed wasn't busy slowing things down. And I won't be worried about the 2.6 percent, because the 2nd quarter saw some very high energy costs. People decided not to do things based on the increased cost of doing or buying just about anything.

So get a grip people. The sky is not falling.

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