This is a rather long post, so feel free to skip it if you’re not up to it. But Biz Buzz thinks it’s something worth thinking about. Working at a newspaper, we have several sources to get information. And sometimes, it’s interesting to read the take of what writers are saying about the same report or topic. Let’s take today’s GDP report, which shrank at a 0.3 percent annual rate for the third quarter. There you go – there’s the news straight up. But read what other writers are saying:
The economy jolted into reverse during the third quarter as consumers cut back on their spending by the biggest amount in 28 years, the strongest signal yet the country has hurtled into recession.The broadest barometer of the nation’s economic health, gross domestic product, shrank at a 0.3 percent annual rate in the July-September quarter, the Commerce Department reported Thursday. It marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession. The latest GDP reading marked a rapid loss of traction for the economy, which logged growth of 2.8 percent in the second quarter, and is sure to buttress the belief of many economists that the nation is in the throes of a painful downturn. The deterioration reflected a sharp retrenchment by consumers, whose spending accounts for the largest chunk of national economic activity. Consumers ratcheted back their spending at a 3.1 percent pace in the third quarter, the most since the second quarter of 1980, when the country was in the grip of recession. While the third-quarter’s contraction wasn’t as deep as the 0.5 percent annualized decline analysts expected, the poor showing underscored the terrible toll of the housing, credit and financial crises.
Sounds pretty bleak, doesn’t it? But here’s another report about the GDP numbers:
European stock markets extended gains Thursday after Wall Street opened sharply higher in the wake of a smaller than anticipated contraction in the U.S. economy in the third quarter. World markets had already been higher earlier, including strong gains in Asia, after the U.S. Federal Reserve slashed interest rates Wednesday to help revive the world’s largest economy and opened new credit lines with other central banks in an attempt to deal with the world financial crisis. The Dow Jones industrials were up 200 at the 9,189 level, a 2.2 percent gain. The FTSE 100 index of leading British shares was 103.93 points, or 2.5 percent, higher at 4,346.47, in afternoon trading London time, while France’s CAC-40 was up 71.41 points, or 2.1 percent, at 3,474.28. Germany’s DAX was the biggest gainer in Europe, having underperformed Wednesday after shares in Volkswagen AG slumped around 40 percent, as liquidity constraints on the share were eased. The DAX was up 217.44 points, or 4.5 percent, at 5,026.13. The renewed bout of buying was stoked by a Commerce Department report showing that U.S. gross domestic product, or GDP, decreased at a 0.3 percent annual rate in the July-September quarter. That is less of a drop than the 0.5 percent analysts expected. “With much economic data over the last month proving to be more negative than expected, today’s figures will likely provide some reassurance,” said Richard Snook, senior economist at the Center for Economic and Business Research. “The very marginal contraction shows some resilience in the U.S. economy although recession remains certain,” he added.
Wow – what a difference in tone there, isn’t there? Here’s another more chipper report:
Wall Street was feeling more upbeat Thursday after a government report showed the economy contracted in the third quarter by less than expected and after the Federal Reserve’s second interest rate cut in a month. The major stock indexes jumped more than 2.5 percent, including the Dow Jones industrials, which rose 225 points. The Commerce Department reported that the nation’s economic output was the weakest since the third quarter of 2001, but it wasn’t as bad a showing as Wall Street had feared. The department said the gross domestic product, the measure of all goods and services produced within the U.S. fell at a 0.3 percent annual rate in the July-September quarter, rather than 0.5 percent as expected.
And just to show we’re “fair and balanced,” here’s another report that’s not as rosy as the previous two:
A day after the Federal Reserve slashed a key interest rate to battle an economic downturn, the government reported Thursday the economy did shrink in the summer, sending the strongest signal yet that a recession may have already begun. The Commerce Department reported that the gross domestic product, the broadest measure of economic health, fell at an annual rate of 0.3 percent in the July-September period, a significant slowdown after growth of 2.8 percent in the prior quarter. The spring activity had been boosted by the $168 billion economic stimulus program, but the economy ran into a wall in the summer as the mass mailings of stimulus checks ended and consumer confidence was shaken by the upheavals on global markets. Consumer spending, which accounts for two-thirds of the economy, dropped by the largest amount in 28 years in the third quarter. The classic definition of a recession is two consecutive quarters of negative GDP. Many analysts believe the GDP will decline in the current October-December period by an even larger amount and they are forecasting a negative GDP figure in the first three months of next year. The National Burea of Economic Research, which is the official arbiter of recessions in this country, has not said when it will make its determination of whether the country has entered a recession.
By the way, all these stories came from the Associated Press, with either business reporters or economic reporters.
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