A report released by the U.S. Department of Commerce Thursday showed that the nation’s economy surged from July through September at the fastest rate in nearly two decades.
The national gross domestic product, the broadest measure of a country’s economic performance, grew at a 7.2 percent annual rate in the last quarter — more than double the 3.3 percent rate of the previous three months.
“We’re growing the American economy and soon we’ll be growing more jobs,” DOC Secretary Don Evans said. “Today’s strong performance shows the American economy is headed in the right direction thanks to President Bush’s Jobs and Growth Agenda.”
University of Wisconsin economics professor Don Nichols said this report is consistent with the forecast from the last few months, including his predictions in early September.
“This is the evidence that the recession that ended in 2001 is in full fledge recovery,” Nichols said.
Nichols added that the actual percentage is a little stronger than anyone expected.
“This is an unusual growth,” he said. “It will continue to grow faster than three percent until we fix job unemployment. This [report] will start the planning for job growth.”
Economists generally agree that the near rock-bottom, short-term interest rates — as well as President Bush’s third round of tax cuts — triggered consumers and businesses to spend and invest more, helping the economy move at a faster rate during the summer.
Nichols added that the surge could easily turn around and start decreasing; thereby making sure the rebound is self-sustaining.
“By creating the conditions for greater economic growth, President Bush is setting our country on the right track towards helping all Americans find work,” Evans said. “While we are encouraged by these numbers, the president will not rest until there are enough jobs for every American worker.”
The nation’s payrolls grew by 57,000 in September — the first increase in eight months. This will “definitely” provide more jobs for college students after graduation, Nichols said.
Christine Lupton, former advisor at the UW College of Agriculture and Life Science, said it is unlikely that this will make much of a difference.
“In light of what it’s done to state, county, and city positions, there is no way there’s going to be new positions there,” Lupton said. “I’m seeing that students are struggling [to find jobs], and they’re sending out resumes and not getting a response.”
Lupton advised students who are searching for jobs after graduation to have someone look at their resume, talk to a career advisor, join professional associations in their specialized field, and take internships.
Economist said that sustained turnarounds in capital spending and in hiring are crucial to ensuring that the economic resurgence moves ahead.
Other factors contributing to the growth in GDP include federal spending, which grew at a 1.4 percent rate. This is largely due to military spending for the war in Iraq, Nichols said.
Experts also said the economy will probably grow at a slower but still healthy 4 percent rate over the next quarter as some of the stimulation from the tax cuts fades.
