US Economy Strong.....

The US added 215,000 new jobs last month indicating the economy has gotten over the short-term shocks of the two hurricanes this past summer. So far this year, according to the Bureau of Labor Statistics, the economy has added 1.84 million jobs or around 167,000 per month.

Additionally, 3Q GDP grew at an estimate 4.3%, and since the beginning of 2003, almost 3 years, it has averaged 3.9% (According to the Bureau of Economic Analysis).

Of course, the Bush Presidency hasn't been all economic roses. The economy was clearly weakening at the end of the Clinton Presidency where 3Q 2000 shows -0.5% and 1Q 2001, when Bush took over from Clinton also marked a -0.5% decline in GDP. During the 19 quarters of the Bush administration, GDP has grown 2.7% on average as compared with the 3.6% rate during the Clinton years.

However, a good part of the Bush shortfall is attributed to his first year in office where the economy, hurt by the follow through of the slowing during the end of the Clinton years and the aftermath of the 9/11 terrorist attacks, struggled with a GDP growth rate of only 0.2% for the year. Excluding the first year, GDP has put in a more respectable 3.3% growth, close to the economy's long-term growth potential that has actually averaged 3.5% since 1947 (all data from Bureau of Economic Analysis).

As Larry Kudlow cogently explains...

Business profits have increased at a double-digit pace for nine straight quarters, only the third time this has happened in 55 years. At 8 percent of GDP, after-tax earnings are at a record high. Ditto for household net worth and total U.S. employment. In fact, average monthly job creation over the past two years is running at 179,000, more than five times the GM layoff total.

The source of this good fortune is clear: American businesses, the backbone of our economy, have responded to tax incentives that sharply reduced the cost of capital. Capital spending expanded at 13 percent last year, the best performance in two decades. This year’s tally should be even larger, meaning more jobs and higher incomes.

and why?

Inside the business boom is the productivity revolution of the Google/Internet economy, where output per hour has grown at a 3 percent yearly rate for 10 years. Cynics derided the Internet revolution when the bubble burst 5 years ago. But it turns out that the Internet survivors are now huge influences on the communication platforms, information content, and distribution channels that are remaking the way businesses and families live and work.

Of course, the mouthpiece of the Democratic party, the New York Times, does not see things this way. The NYT sees bad economic news in every new data release, no matter how good it is. Additionally, they have been amazed that higher gasoline prices led to lower demand and resulting in lower prices today! Incredible how economic reality, the relationship between prices, supply and demand, that any freshman in college learns in basic economic courses, amazes the financial intellectual giants at the NYT.