The US economy grew briskly in the 3rd quarter of this year, even with the record high fuel prices and the effects of Hurricane Katrina. According to the Washington Post:
"The nation's gross domestic product, a broad measure of the value of all goods and services produced, rose at a 3.8 percent annual rate in the third quarter, up from a 3.3 percent pace in the second quarter, the Commerce Department said. That first estimate of GDP growth could be revised in coming months.
The gain in economic momentum largely reflected faster growth in consumer spending, which accounts for about two thirds of economic activity, the Commerce Department said.
The department said it could not quantify the hurricane's economic effects. The Labor Department said Thursday that 502,000 people have filed new claims for unemployment insurance benefits because of the storms."
The underlying data, though, is maybe not quite as optimistic as the 3.8% number suggests. Much of the growth is being driven from consumer spending, which is being accomplished now by borrowing, for Americans are spending greater than 100% of their disposable income. This is not a trend that can continue indefinitely.
However, US growth rates are far better than Europe and Japan and have been so for over a decade. The Economist writes concerning a new theory on why American growth has outpaced Europe that is an interesting argument.