Economy remains unsluggish

AP/NY Times:

The economy picked up speed in the summer, growing at a brisk 3.9 percent pace, the fastest in 1 1/2 years and an impressive performance even as a credit crunch plunged the housing market deeper into turmoil.

The latest snapshot of the country's economic health, released by the Commerce Department on Wednesday, suggested that the economy is demonstrating much resilience and thus far holding up well to the strains in the housing and credit markets, which had intensified during the third quarter and rocked Wall Street.

Individuals ratcheted up their spending. U.S. businesses sold more goods abroad and boosted some investment at home. Those were some of the main factors helping to push up overall economic activity in the July-to-September quarter.

The third quarter's growth rate was up slightly from a 3.8 percent pace logged in the second quarter. It marked the strongest showing since the first quarter of last year.

The increase in third quarter gross domestic product exceeded analysts' forecasts for a 3.1 percent growth rate for the period. Gross domestic product is the value of all goods and services produced within the United States and is considered the best barometer of the country's economic fitness.

The strong performance came despite the worsening housing slump.

...

The growth is obviously a disappointment to liberals and Democrats who desperately want to run against the Bush economy and tax cuts. It also is another quarterly strategic defeat for Osama bin Laden's plan to destroy the economy in hopes of making it impossible to fight his al Qaeda organization. It also demonstrates that the underlying economy is much stronger than housing market would indicate.

This should help stocks that are not in the housing sector continue to be valued in the market. Earlier stock market declines that were based on the housing/mortgage problems should be reversed. There are plenty of good companies with sound markets to invest in. As the Enron debacle showed, there are many companies who are still doing things right and the market should not discount their prospects because of problems in other sectors.

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