Hello, I'm Mark Pearson. Equity markets declined Friday after the government reported the U.S. economy grew at a slower pace than expected during the second quarter of 2010.
According to the Commerce Department, gross domestic product, the broadest measure of the economy, grew at an annual pace of 2.4 percent from April to June. The figure marked the fourth straight quarter of growth, but was less than the 2.5 percent economists had forecast.
Consumer spending, which accounts for about 70 percent of all economic activity, grew by just 1.6 percent in the second quarter, in its weakest showing since the end of 2009. Instead of consuming, Americans saved 6.2 percent of their disposable income. That's the highest level of personal savings in a year.
Earlier in the week, the government announced orders to U.S. factories for big-ticket durable goods fell 1 percent in June. The correction was the second consecutive monthly reduction and the largest decline since August of 2009.
Wall Street took the reports in stride, and the Dow settled Friday with a weekly gain of 66 pts.
Though buffeted by the same economic winds as its urban counterpart, rural America's economy, often times, is more dependent on fundamental variables. Not the least of which is weather... And so far this summer, Mother Nature has dampened spirits in key corn and soybean producing regions.
The old adage, "rain makes grain" may be prophetic this growing season -- at least from a national perspective -- but in parts of the Midwest, "too much rain is yielding pain."
It rained in some part of Iowa 22 days last month. Nearly 10.5 inches fell on the Hawkeye State... about 6 inches more than normal. The torrential rains were enough for the nation's leading corn and soybean producing state to post its wettest June in recorded history.
And in the wake of June, came July, when the Fayette County town of Oelwein, recorded a record 19.6 inches of rain. High water washed through communities along the Maquoketa and Wapsipinicon Rivers.
Several towns in northeast Iowa received 6-to-10 inches of rain in one 12-hour period. Sooner or later, something had to give -- and it did last weekend.
At Lake Delhi, a resort community with about 700 homes and cabins -- floodwaters from the Maquoketa River ripped a 30-foot hole in an earthen dam built nearly a century ago. The breech drained the lake threatening the nearby town of Hopkinton.
Initial concerns focused on towns downstream, but the water fanned out over thousands of acres of row crops.
Mike Ryan: Delaware County Emergency Management: "When it got past the geological formations that kept the water in the stream bed, and got into, away from the limestone bluffs, and got into more of the row crop ag land. The water was allowed to spread out, to de-energize itself which was good for the people downstream, it was good for the county roads, the bridges. The problem we have with this, its going to have a detrimental effect on the people's row crops in that area.
Last week's torrential rains ravaged an estimated 8,000 acres of farmland in two Iowa counties alone, 4000 acres each in Delaware and Jones Counties. The full extent of the damage this late in the growing season is tough to fully assess. Topsoil erosion, piles of debris and the threat of mold all loom on the horizon.
Many of the acres were planted in row crops, but pastureland also was impacted by the deluge. The region has yet to receive an "official" disaster declaration, but locals were quick to assess the damages.
"This is the worst I've seen."
Even though some parts of Iowa are coping with significant losses, overall, crops in Iowa -- and most of the U.S for that matter -- are in very good shape.
According to Monday's USDA report, 72 percent of the U.S. corn crop is in good to excellent condition, slightly ahead of a year ago at this time. Record yields are a possibility and global demand is strong.
Soybeans also are doing well and the Agriculture Department estimates 67 percent of the crop is in good to excellent condition. That's unchanged from the previous week, but down 8 percentage points from early June.