Economy surges ahead - East Valley Tribune: News

Economy surges ahead

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Posted: Friday, October 31, 2003 6:05 am | Updated: 2:01 pm, Thu Oct 6, 2011.

WASHINGTON - A surprisingly strong U.S. economy grew at its fastest pace in nearly two decades this summer, boosting hopes that a healthy, jobscreating recovery may be getting under way.

The gross domestic product — the sum of all the goods and services produced in the United States — rose at a 7.2 percent annual rate in the July to September quarter, the Commerce Department reported Thursday.

That was up from 3.3 percent in the previous quarter, and was the best performance since the economy recorded a 9 percent growth rate in the first quarter of 1984.

Consumers were the force behind the sizzling growth, thanks to an income tax cut and a flurry of mortgage refinancings that put more cash in their pockets. Sales of big-ticket items, from cars to furniture, were particularly strong.

Construction of new homes also rose sharply.

‘‘The tax relief we passed is working,’’ President Bush said. ‘‘We left more money in the hands of the American people, and the American people are moving this economy forward.’’

Growth is expected to slow in the current period because the tax cut and the mortgage-refinancing boom won’t be repeated, but economists predict relatively strong growth into next year.

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