The US economy turned the corner with stunning growth in the third quarter but a substantial rise in jobs is needed to keep the recovery going, analysts say.
US President George W. Bush managed to get his US$350 billion "Jobs and Growth Act" passed in May.
Half of that promise appeared to be been fulfilled with economic growth in the third quarter hitting a 19-year high of 7.2 percent, fuelled by consumers opening wallets fattened by tax rebates.
It was stunning evidence that the economy was bouncing back from the Internet collapse of the late 1990s, the Sept. 11 attacks and the impact of the Iraq war.
But analysts said the report of rapid third-quarter growth was helped by some exceptional circumstances.
"Four forces came together to produce a super-sized quarter: a major tax cut, a major new wave of cash-out mortgage refinancing, end-of-model-year clearance sales by the auto industry and a post-war bounce in confidence," said Lehman Brothers economists Ethan Harris and Joseph Abate.
They expected growth to slow to the 3.5 to 4 percent range in the coming quarters.
On Friday, an advance taste of slowdown appeared as fresh data showed consumers trimming spending.
Consumers cut spending by a steeper-than-expected 0.3 percent in September as after-tax incomes plunged 1 percent, largely because no more tax rebates were landing in people's mailboxes.
Consumer spending is critical because it accounts for two-thirds of US economic activity.
As the tax cuts fade as a driver of the economy, jobs will be critical to the outlook, analysts say.
"It will be very difficult to get growing personal income numbers without an increase in employment," Wachovia economist Gina Martin said.
"The tax cuts helped steer the economy in the third quarter but now it is time for job growth to take the reins."
US businesses hired 57,000 extra people in September, finally snapping a seven-month run of layoffs, but the number of job losses since 2001 still amounts to 2.7 million and the jobless rate stagnated at 6.1 percent.
"We need more job growth to get wages increasing faster so consumers don't have to depend upon refinancings and tax checks for their money," said Naroff Economic Advisors president Joel Naroff.
"No matter how you dress it up, the September report makes it clear that without the treats given to us by tax cuts and low interest rates, consumers are on their own."
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique