STOCK MARKET WATCH -- Wednesday, 29 October 2014

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17. ECONOMY 101: 5 THINGS TO KNOW ABOUT US GROWTH

http://hosted.ap.org/dynamic/stories/U/US_GDP_5_QUESTIONS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-10-29-04-01-18

Some questions and answers to consider:

- IS THE U.S. STRENGTH FOR REAL?

Probably so. Thanks to robust job gains, most analysts think the economy is finally emerging from five-plus years of stop-and-start expansion. They foresee growth at a healthy 3 percent annual rate from now through 2015. If so, next year would be the first full year of 3 percent growth since 2005 - two years before the Great Recession began.

Keep in mind, though: Nothing is certain. Economists made similar predictions for 2014, only to see a brutal winter and a plunge in exports cause the economy to shrink at a 2.1 percent annual pace from January through March. Growth did roar back in the April-June quarter. Still, for the first half of 2014, it was just 1.2 percent.

- WHY IS THE U.S. OUTPACING OTHERS?

Europe is on the brink of its third recession in seven years. Japan is faltering. Persistent weakness is slowing China, Brazil and other major economies.

Even as the United States enjoyed a second-quarter burst of growth - a vigorous 4.6 percent annual rate - the 18 nations that use the euro didn't grow at all. And Japan's economy, squeezed by a sharp sales tax increase, shrank 7.1 percent.

In China, the world's second-largest economy, year-over-year growth slowed from 7.5 percent in the second quarter to 7.3 percent in the third. That's still robust. But to keep things in perspective, growth in China had topped 10 percent for three decades.

Brazil's economy has been gasping after years of solid growth, partly because of slumping commodity prices.

The U.S. economy is benefiting from a range of factors. The Federal Reserve acted more aggressively to stimulate growth than central banks in other countries did. The nation has significantly strengthened its financial system. The economy is relatively insulated from weakness overseas because it depends much less on exports than most other countries do.