Wild ride: Economic news not for faint-hearted

by The Oklahoman Editorial Board Published: September 4, 2007
SOMETIMES, economic news is cast in all-or-nothing terms. The sky's the limit — or it's falling. Recent developments have been delivered in similar, roller-coaster terms.

The stock market continues to gyrate, seeking equilibrium in the wake of trouble in the mortgage-lending sector. Bad loans, especially subprime arrangements with at-risk borrowers, have resulted in increased numbers of defaults. The ripple has reached a number of hedge funds that were invested in mortgage lending companies.

Even so, the government last week said the nation's second-quarter gross domestic product rose at a seasonally adjusted annual rate of 4 percent, an upward revision from 3.4 percent growth originally estimated. It's the strongest growth since GDP rose 4.8 percent the first three months of 2006.

Noteworthy is the fact the second quarter is when problems in the lending sector first began appearing. Considering those troubles, the revised GDP rise suggests overall economic strength is pretty good.

Businesses grew their inventories more than expected in the second quarter and spent more than previously estimated. Trade grew more than first thought. U.S. exports revised up to a rate of 7.6 percent instead of 6.4 percent originally reported, while imports fell 3.2 percent, compared with 2.6 percent.

Consumer spending, which accounts for about 70 percent of economic activity, increased by 1.4 percent instead of 1.3 percent in the second quarter. Durable goods orders also were a little higher than previously reported.

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by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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