Exports helped raise GDP
TEXT OF STORY
Stacey Vanek-Smith: Yesterday, the Dow Jones Industrial Average added 1.8 percent thanks to a higher-than expected GDP. The Gross Domestic Product is a measure of our economic output and it grew a lot more in the spring than we first thought. That was thanks, in part, to an up-tick in exports. The weak dollar has made our products very attractive overseas. And U.S. companies are increasingly relying on foreign sales for growth, as Nancy Marshall Genzer explains.
Nancy Marshall Genzer: It was no coincidence that U.S. CEOs like Bill Gates showed up at the Olympics in China. They didn’t limit themselves to the opening ceremonies. Gates sat through a badmitten match and later said he was “very impressed.” Of course, Gates is also impressed with the giant Chinese market. John Hancock economist Oscar Gonzalez says Asian demand for all electronics is huge.
Oscar Gonzalez: If you think of the number of people that could acquire a cell phone in Indonesia, China, India, relative to the United States, there’s no comparison.
Gonzales says U.S. companies have already changed their business strategies to cater to hot foreign markets. But Wachovia chief economist Mark Vitner says eventually those markets will get too hot.
Mark Vitner Some economies are overheating — inflation problems in China and India and Russia. And now they’re cooling off.
As a result, Vitner expects U.S. exports to taper off, next year.
I’m Nancy Marshall Genzer for Marketplace.
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