ECONOMY STRONG OR REPORTING WEAK?

IHT STORY SUGGESTS US ECONOMIC GROWTH SAVING WORLD MARKETS FROM TAILSPIN

I was amazed to see an article entitled "Strong U.S. economy helps slow drop in world markets", knowing that the dollar is falling, people are struggling to make ends meet, we're constantly hearing about bankruptcies on the rise, and the housing market is, well, in free-fall, with major lenders under investigation for lending-to-loot. The story was based on figures reported by the US Commerce Department, which had just reported (Friday) that the "US economy" (ostensibly, GDP) had grown by 3.4 % in the 2nd quarter of 2007, even as world markets looked down a steep slope due to fears of a global credit crisis.

I had just spoken to a friend whose husband and father work in real estate, who complained of the poor state of things, and the impossibility of selling anything that had increased in value in recent years. Just after seeing the story, I spoke to a financial professional who expressed surprise, telling me his assessment was that GDP could not have been far above 1.5 %, if taken as an annual measure. We discussed the tendency of federal agencies, over the past several years, to issue such reports, then some weeks later to (much less visibly) publish "revisions", normally cutting positive figures in half. [Full Story]