Editore"s Note
Tilting at Windmills

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December 5, 2003
By: Kevin Drum

ECONOMIC UPDATE....Crikey, what to think about the economy? Beats me.

GDP growth was spectacular in the third quarter, which is good. Unemployment is down a tick, which is good.

On the other hand, job growth is still anemic, holiday shopping figures so far are OK but nothing to write home about, and the Fed apparently has no intention of raising interest rates anytime soon, which means they must be less than convinced that the recovery is about to take off.

What's more, the dollar has plummeted against the euro recently, our trade deficit is still growing, and the bond market seems unimpressed with estimates of future growth.

And then there's productivity. What the hell to make of that? I'm keenly aware that I'm not qualified to have an opinion on this, but productivity growth of over 9% is unreal. There's just something wrong with that number.

With negative real interest rates and a $500 billion deficit you'd sure as hell think the economy ought to be picking up steam by now. And I hope it is. But there's something mightly peculiar about this recovery and I'm still nervous about it. I think I'll remain on the fence for a while.

Kevin Drum 9:38 AM Permalink | Trackbacks

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