The SBA Office of Advocacy released the Quarterly Indicators: The Economy and
Small Business for the third quarter of 2007. Among the trends that are
observed, real gross domestic product grew 3.9 percent in the third
quarter of 2007, much faster than anticipated and comparable to second
quarter growth. Strong growth in exports (assisted by a weak dollar) and
solid gains in consumer spending helped fuel the rise in output.
Meanwhile, unemployment rose slightly, to 4.7 percent in September from
4.5 percent in June, but the expanding economy generated 282,000 more jobs
than it lost.
In September, the Federal Reserve lowered its federal funds target rate by
0.5 percent. Interest rates paid by small businesses and consumers moved
in tandem. Many observers contend that the move was necessitated by credit
concerns in the financial markets related to sub-prime lending. In
addition, overall inflation remained under control, with the consumer
price index rising an annualized 1 percent and producer prices falling 0.5
percent. Year-to-year inflation figures show a more substantial increase.
Consumer prices, for example, rose 2.8 percent from September 2006 to
September 2007. One culprit is higher energy prices. The price of a barrel
of West Texas crude oil rose $12.45 in the quarter, averaging just below
$80 a barrel in September.
Quarterly Indicators: The Economy and Small Business is located here.