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Seven Percent Growth in GDP Indicates US Economic Rebound - 2003-10-30


There is evidence of a sharp rebound in the U.S. economy as the gross domestic product, in the July to September period, expanded at a more than seven percent annual rate, its best performance in 19 years.

Jim Glassman, an economist at J.P. Morgan in New York, calls the Commerce Department report extraordinary. He says confidence is taking hold, creating momentum for sustained growth and, importantly, job creation.

"I think we are starting to see a little of that already," said Mr. Glassman on CNBC television. "The pace of layoffs has come down a little bit. The temporary hiring has picked up. I think in the next month or two we are going to see hiring. It would be extraordinary if five percent economic growth, which is what we have seen in the past two quarters, was not enough to make companies hire."

Under Secretary of Commerce Kathleen Cooper agrees that job growth is coming and should reach 200,000 per month very soon.

"There is a lag between when the economy really starts growing, the gross domestic product, and when the job market takes that into account," explained Ms. Cooper. "And we have seen that in the past six months or so. In September, we saw a small increase in employment, and based on the good news we are getting on unemployment claims this morning, we had new unemployment claims down below 400,000 for the fourth week in a row. For that reason as we move forward over the next few months we will seen employment growth."

The U.S. economy has lost 2.6 million jobs in the past 2.5 years.

The Gross Domestic Product report shows big increases in capital investment and a nine percent rise in exports, which is largely attributable to the dollar's decline against other currencies during the past 18 months.

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