The nation's broadest measure of total output of goods and services, the Gross Domestic Product (GDP) is predicted to grow at a seasonally adjusted rate of 4.7 percent in the current quarter and continue to grow at a solid 4.0 percent rate during the last quarter of 2003. This prediction comes from a survey of 53 economists, conducted by the Wall Street Journal. If all the numbers hold up, this year will post the fastest growth rate since the last two quarters of 1999 when the economy grew at a rate of 6 percent.

Although the numbers are viewed with caution by many analysts, there are many signs of improved economic conditions to support the survey's predictions. On the consumer side of the ledger are improved new car and light truck sales, which came in at 1,631,755 vehicles sold in August for one of the best sales months in two years. On the retail side, Wal-Mart Stores Inc. exceeded its own sales estimated for August and back-to-school sales were reported strong among all retailers. Orders for durable goods have also risen, indicating that stores are expecting increasing sales in these markets as well.

One influence on consumer spending has been the Bush tax cut package. Early reports were skeptical of how much consumers would spend of the tax cut, but evidence suggests that consumers spent their rebates rather aggressively. Now, "it seems that we've gotten more sustained spending out of tax cuts than I had expected," said John Silvia, chief economist at Wachovia Corp. Silvia upped his third-quarter growth estimate from an earlier predicted 3.4 percent to 5.5 percent in the current survey.

Several other factors have helped to provide a jump in spending and economic growth. Corporate profits have been higher than expected, leading to more investment spending. Further, low interest rates and the springtime market for mortgage-refinancing resulted in lower house payments for millions of Americans and transferred purchasing power to other markets; and finally, the end to major combat in Iraq has served to improve both consumer and business expectations.

The major risk to continued economic growth remains the job market. Despite an improved economic growth picture, employers still seem a bit reluctant to add new workers. According to nearly half the economist surveyed, a lack of job creation remains the primary threat to continued expansion. Still, 37 of the economists surveyed expected employment to grow by the end of the year, and they expect a million or more new jobs over the next twelve months.

Given the signs of increased consumer and business spending, and recognizing the threat posed by the jobs picture, the economy is expected to grow at its strongest pace in nearly four years, "It has all the earmarks of a major turning point," says Allen Sinai, chief economist at Decision Economics Inc., an economic forecasting firm.

(Updated October, 2003)