Economic Growth Continues, Making Rate Hike Probable

By Rubin, James H. | THE JOURNAL RECORD, October 29, 1994 | Go to article overview

Economic Growth Continues, Making Rate Hike Probable


Rubin, James H., THE JOURNAL RECORD


WASHINGTON _ Barely slowed by a pile of interest-rate increases, the national economy is still bubbling _ making it more likely even higher rates are on the way.

But strong growth figures for the third quarter reported Friday by the Commerce Department were balanced by benign inflation data that helped buoy financial markets.

Led by higher consumer spending, business investment and government purchases, the gross domestic product _ the total output of goods and services produced in the United States _ grew at a 3.4 percent annual rate in the summer. That was slower than the 4.1 percent rate in the spring, but easily exceeded analysts' expectations.

"The economy is still humming along, but not so fast as to generate an immediate worsening of inflation," said economist Robert Dederick of the Northern Trust Co. in Chicago. "The pace is one that does suggest if it continues, inflation pressures will emerge later."

The economy is "probably a bit too spry for the Federal Reserve's liking," said Robert Barr of the U.S. Chamber of Commerce.

The Dow Jones industrial average was up more than 50 points by early afternoon, rising along with bond prices and the dollar on international currency markets.

Analysts said the Federal Reserve is almost certain to raise short-term interest rates a sixth time this year when its policy-making Federal Open Market Committee meets Nov. 15 _ after the congressional elections. They said the only question is how much, as the Fed tries to convince financial markets it is not losing the battle to keep inflation at bay.

"The debate will start at a half percentage point," predicted economist Eugene Sherman of M.A. Schapiro Co. in New York City. "The real debate is whether it will be three-quarters or a full percentage point. I think they'll go 1 point."

Most of the expansion in the quarter that ended Sept. 30 was due to accelerated consumer spending, which advanced at a 3 percent rate _ more than double the gain in the previous quarter.

But inventory buildup, which surged in the second quarter, increased as well. Analysts called it a clear sign that businesses are brimming with confidence and stocking up in anticipation of higher prices down the road.

The fourth quarter could mean even brisker growth, they said, if Christmas sales prove as strong as many expect.

The Clinton administration welcomed the GDP report. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Economic Growth Continues, Making Rate Hike Probable
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.