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Military action in Iraq may not have resulted in findng WMDs or Al Qaeda
connections, but at least its doing some good.
Ed Weick C B C . C A N e w s -
F u l l S t o r y :
Defence spending gives shot to U.S. economic growth Last Updated Thu Aug 28 13:23:25 2003 WASHINGTON-- The biggest increase in spending on defence since
the Korean War helped the U.S. economy grow by 3.1 per cent in the second
quarter and beat expectations.
Just a month ago, the U.S. government has forecast that the economy would
grow by 2.4 per cent. Economists had been projecting gross domestic product
would rise by 2.9 per cent.
The economic growth was the best since third quarter of last year and
followed growth of only 1.4 per cent in the final three months of 2002 and the
first quarter of 2003.
In a report released Thursday, the Commerce Department said military spending
– largely fuelled by the U.S. involvement in Iraq – surged at an annual rate of
45.9 per cent. That was the biggest increase in U.S. defence spending since the
third quarter of 1951.
Consumers also kept on spending money on big-ticket durable goods, includes
cars and appliances. A key factor in economic health, consumer spending was up
3.8 per cent, one-half of a percentage point better than expected.
Business spending – which had been in the doldrums – showed signs of life
again. Spending on equipment and software jumped 8.2 per cent, following a 4.4
per cent contraction in the first quarter.
Written by CBC News Online staff
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