Sayeth the NY Times:
The American economy grew at a revised annual rate of 3.1 percent in the second quarter, the government reported today, and the unexpected strength is leading economists to raise their forecasts for the rest of the year.
Among the positive signs are the continued strength of consumer spending, the bounce-back in business capital investment, the leanness of business inventories and a jump in corporate profits.
A surge in military spending connected with the war in Iraq was also a big contributor to second quarter growth.
Inflation as measured by the gross domestic product is still low, rising at an annual rate of 0.7 percent in the second quarter, a fact that analysts said would reinforce Wall Street’s belief that the Federal Reserve would keep short-term interest rates low for a long time.
What scares the hell out of me are the rising gas prices- high fuel costs could really slow the recovery.