Yesterday, the Commerce Department released figures showing that the fourth quarter’s annual growth rate for gross domestic product (GDP) was 4 percent. The news outlets where I saw this reported made this news sound mosly bad. They noted that the projected growth rate had been 5 to 5.5 percent, and that the actual rate was down significantly from the figure of more than 8 percent in the third quarter. No mention was made of the fact that the third quarter number was the highest in more than twenty years; nor was it noted that the no half year has produced growth as robust as the second half of 2003 since the first half of 1984, or that the year as a whole was the best since 1999. And, or course, it would have been asking far too much to expect anyone to point out that, if the fourth quarter figures had been disappointing, this would refute Paul O’Neill’s claim that the third quarter figures show that the last Bush tax cut was unnecessary.
This Washington Times editorial takes a closer look at the numbers and finds that the Bush recovery remains strong. For example, “Business investment, which experienced nine consecutive quarters of decline beginning in the first quarter of 2001, increased for the third quarter in a row. The housing boom continued, with residential investment rising at an annual rate of more than 10 percent for the second quarter in a row. And exports, reflecting the decline in the value of the dollar, were more than 6 percent higher in the fourth quarter of 2003 than they were a year earlier.” Only the employment numbers are disappointing, but it is difficult to believe that, with business investment and exports increasing, we won’t soon see further improvement in the labor market.
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