The US Bureau of Economic Analysts last week reported that real gross domestic product — the value of the production of goods and services in the United States, adjusted for price changes — increased at an annual rate of 3.9 percent in the third quarter of 2014. And in the previous quarter, real GDP increased 4.6 percent. The American stock markets keep setting new records.
The current issue of The Economist features an article headlined “America’s economy: The lonely locomotive”. GDP this year in Japan is up less than 1 percent; Germany, 1.4 percent; France, 0.4 percent; Brazil, 0.4 percent, and Russia, 0.6 percent. All major currencies tracked by The Economist are lower today versus the dollar than they were a year ago. The currencies of oil-producing countries Russia and Venezuela have collapsed versus the dollar.
Last week, the Society of the Plastics Industry (SPI) released data showing that the positive trends continue to buoy the plastics equipment business. Shipments of primary plastics equipment (injection molding, extrusion and blow molding equipment) for reporting companies totaled $301.4 million in the third quarter. For the year to date, the total value of primary equipment shipments is up 6 percent compared to 2013.
What’s going on here? When I turn on CNN or Fox News, all I hear is gloom and doom and talk about the incompetence of our government.
In 2008, the USA faced collapse of its bedrock financial institutions, a calamity that triggered the worst domestic economic downturn since the Great Depression. Former president George W. Bush began the financial stabilization plan that initiated the turnaround that has continued under President Barack Obama’s administration, including actions of the independent Federal Reserve Board. Current economic strength is also due to the fracking revolution, which has been more serendipitous than planned. The credit for the success of fracking, I think, really goes to Texas oilman George Mitchell who persevered in developing the technology and then put it into place.